Thursday , November 23 2017

Mizuho’s profit falls on signs of job cut

epa05446993 People use ATM machines at a Mizuho Bank Ltd. branch in downtown Tokyo, Japan, 29 July 2016. Mizuho Financial Group Inc. (MHFG) announced a net income for the first quarter of fiscal year 2016 drop to 132.6 billion yen (around 1.27 billion US dollars) compared with 158 billion yen (around 1.52 billion US dollars) in the previous year.  EPA/CHRISTOPHER JUE

Bloomberg

Mizuho Financial Group Inc.’s profit fell and the Japanese bank offered a bleak assessment of the long-term outlook, confirming it will eliminate thousands of jobs to cut costs. The nation’s third-biggest lender will shed 19,000 positions — about a quarter of its workforce — in the next 10 years, it said in a statement, confirming recent media reports. Lending income declined in the fiscal second quarter, underscoring how negative interest rates are making it tougher for Japan’s biggest banks to make money from doling out credit.
“Our expense ratio has risen significantly and this remains a major challenge, which is why we need fundamental structural reforms,” Chief Executive Officer Yasuhiro Sato told reporters in Tokyo on Monday. “Growing the top line is difficult in this global competitive environment, so it’s essential that we improve our productivity.”
Like their global peers, Japanese banks are contending with rapid advancements in technologies that are threatening traditional jobs in the industry while also providing an opportunity to make processes more efficient. Rival Sumitomo Mitsui Financial Group Inc. said on Monday that it has been using technology to boost productivity and cut costs.
“We expect Mizuho’s structural transformation to help control its rising operating expenses,” said Shunsaku Sato, a senior credit officer at Moody’s Investors Service in Tokyo. The banking group has the worst efficiency ratio — a measure of costs to income — among Japan’s biggest lenders, according to data compiled by Bloomberg.
Net income fell 12 percent to 198.4 billion yen ($1.7 billion) in the three months ended Sept. 30, due to the slump in lending and fee businesses. The result still beat the 146.9 billion yen average estimate of five analysts, as the Tokyo-based bank was able to claw back money set aside for bad loans.
Bond and securities trading profit rose 28 percent to 67.1 billion yen. Lending profit dropped 2.8 percent to 214.6 billion yen. Fees and commissions slipped 2.1 percent to 147.8 billion yen. Bank reversed 108.9 billion yen in provisions from bad loans.

About Admin

Check Also

Morgan Stanley Asia wealth push faces family-office poaching

Bloomberg Asia’s swelling ranks of mega-wealthy are proving to be a mixed blessing for Morgan ...

Leave a Reply

Your email address will not be published. Required fields are marked *