Plagued by heavy losses to its stock portfoilio and credit default swaps (CDS), Japanese banking behemoth, Mizuho Financial Group has reported a surprise loss for the fourth consecutive quarter – reported in Reuters.
Mizuho was one of the few Japanese banks that has invested in toxic assets backed by US sub-prime mortgages and since then hit by losses due to overexposure to the domestic stock market. The bank has reported a group net loss of ¥4.5 billion for April-June. However, it stuck to its full-year forecast for a group net profit of ¥200 billion. Japan’s second biggest bank has recently raised approximately $7 billion capital after losing almost ¥19.8 billion on its stock portfolio.
This is in stark contrast to the financial results posted by rivals like Sumitomo Mitsui Financial Group, which has said that it had returned to profit during the same period. Another major bank, Mitsubishi UFJ Financial Group is also expected to register a profit.
Daniel Tabbush, an Asia bank analyst at brokerage CLSA, said: They are getting further and further in the corner and the only way out of that is really raising a lot more capital. But what’s Mizuho doing? It doesn’t seem to be doing much. Strategically, it’s not as aggressive as the other two megabanks, reported the newspaper.
