Form 6-K MIZUHO FINANCIAL GROUP For: Nov 29

November 29, 2021 6:07 AM EST

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2021

Commission File Number 001-33098

Mizuho Financial Group, Inc.

(Translation of registrant’s name into English)

5-5, Otemachi 1-chome

Chiyoda-ku, Tokyo 100-8176

Japan

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒    Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ☐    No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):82-                    .

 

 

 


THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE INTO THE PROSPECTUS FORMING A PART OF MIZUHO FINANCIAL GROUP, INC.’S REGISTRATION STATEMENT ON FORM F-3 (FILE NO. 333-233354) AND TO BE A PART OF SUCH PROSPECTUS FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Date: November 29, 2021
Mizuho Financial Group, Inc.
By:  

/s/ Makoto Umemiya

Name:   Makoto Umemiya
Title:   Senior Executive Officer / Group CFO


UNAUDITED INTERIM CONSOLIDATED JAPANESE GAAP FINANCIAL STATEMENTS

AS OF AND FOR THE SIX MONTHS ENDED SEPTEMBER 30, 2021

On November 29, 2021, we published our unaudited interim consolidated financial statements as of and for the six months ended September 30, 2021 prepared in accordance with Japanese GAAP as part of our interim securities report (shihanki hokokusho) for the same period filed by us with the relevant Japanese authorities. We have included in this report on Form 6-K an English translation of the unaudited interim consolidated financial statements and the notes thereto included in such interim securities report. Japanese GAAP differs in certain respects from U.S. GAAP. For a description of certain differences between U.S. GAAP and Japanese GAAP, see “Item 5. Operating and Financial Review and Prospects—Reconciliation with Japanese GAAP” in our most recent annual report on Form 20-F filed with the U.S. Securities Exchange Commission.

 

- 1 -


Financial Information

 

1.

Mizuho Financial Group, Inc. (“MHFG”) is a specified business company under Article 17-15, Paragraph 2 of the Cabinet Office Ordinance on Disclosure of Corporate Information, etc. and prepares the interim consolidated financial statements in the second quarter.

 

2.

The interim consolidated financial statements of MHFG are prepared in accordance with the “Ordinance on the Terminology, Forms, and Preparation Methods of Interim Consolidated Financial Statements” (Ordinance of the Ministry of Finance No. 24 of 1999). The classification of assets and liabilities and that of income and expenses are in accordance with the “Ordinance for Enforcement of the Banking Act” (Ordinance of the Ministry of Finance No. 10 of 1982).

 

3.

Ernst & Young ShinNihon LLC conducted a semiannual audit on the interim consolidated financial statements of MHFG for the six months ended September 30, 2021, pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Act.

 

- 2 -


I. Interim Consolidated Financial Statements

(1) Interim Consolidated Balance Sheet

 

    

(Millions of yen)

 
    

As of
March 31, 2021

   

As of
September 30, 2021

 

Assets

          

Cash and Due from Banks

   *8      47,981,981     *8      47,075,429  

Call Loans and Bills Purchased

        589,776          330,455  

Receivables under Resale Agreements

        11,623,654          16,932,692  

Guarantee Deposits Paid under Securities Borrowing Transactions

        2,707,711          2,412,626  

Other Debt Purchased

        3,208,004          3,137,520  

Trading Assets

   *8      12,589,294     *8      12,610,648  

Money Held in Trust

        582,368          637,862  

Securities

   *1, *8, *15      43,697,262     *1, *8, *15      43,725,034  

Loans and Bills Discounted

   *3, *4, *5, *6, *7, *8, *9      83,704,675     *3, *4, *5, *6, *7, *8, *9      82,198,528  

Foreign Exchange Assets

   *7      2,084,756     *7      2,228,808  

Derivatives other than for Trading Assets

        1,719,349          1,407,561  

Other Assets

   *8      6,174,020     *8      5,296,681  

Tangible Fixed Assets

   *10, *11      1,135,449     *10, *11      1,118,837  

Intangible Fixed Assets

        620,224          603,477  

Net Defined Benefit Asset

        1,109,107          959,987  

Deferred Tax Assets

        31,402          27,842  

Customers’ Liabilities for Acceptances and Guarantees

        6,602,744          7,085,422  

Reserves for Possible Losses on Loans

        (575,572        (594,023

Reserve for Possible Losses on Investments

        (0        (1
  

 

   

 

 

Total Assets

        225,586,211          227,195,390  
  

 

   

 

 

 

- 3 -


    

(Millions of yen)

 
    

As of
March 31, 2021

   

As of
September 30, 2021

 

Liabilities

          

Deposits

   *8      133,312,406     *8      129,291,662  

Negotiable Certificates of Deposit

        17,192,572          19,215,068  

Call Money and Bills Sold

        1,312,790          1,431,315  

Payables under Repurchase Agreements

   *8      18,607,255     *8      22,277,769  

Guarantee Deposits Received under Securities Lending Transactions

   *8      958,148     *8      1,229,187  

Commercial Paper

        2,105,067          1,969,424  

Trading Liabilities

        8,115,377          6,464,003  

Borrowed Money

   *8, *12      7,441,822     *8, *12      7,495,869  

Foreign Exchange Liabilities

        532,042          500,486  

Short-term Bonds

        456,045          543,561  

Bonds and Notes

   *13      10,321,672     *13      10,513,503  

Due to Trust Accounts

        1,160,608          1,182,263  

Derivatives other than for Trading Liabilities

        1,739,671          1,480,764  

Other Liabilities

        5,862,013          6,469,900  

Reserve for Bonus Payments

        104,131          58,833  

Reserve for Variable Compensation

        2,935          1,014  

Net Defined Benefit Liability

        71,049          71,775  

Reserve for Director and Corporate Auditor Retirement Benefits

        683          488  

Reserve for Possible Losses on Sales of Loans

        1,074          181  

Reserve for Contingencies

        6,762          8,562  

Reserve for Reimbursement of Deposits

        22,099          19,901  

Reserve for Reimbursement of Debentures

        14,419          12,157  

Reserves under Special Laws

        3,135          3,127  

Deferred Tax Liabilities

        215,557          166,823  

Deferred Tax Liabilities for Revaluation Reserve for Land

   *10      61,915     *10      61,436  

Acceptances and Guarantees

        6,602,744          7,085,422  
  

 

   

 

 

Total Liabilities

        216,224,003          217,554,505  
  

 

   

 

 

Net Assets

          

Common Stock

        2,256,767          2,256,767  

Capital Surplus

        1,135,940          1,125,324  

Retained Earnings

        4,421,655          4,712,422  

Treasury Stock

        (7,124        (8,164
  

 

   

 

 

Total Shareholders’ Equity

        7,807,239          8,086,349  
  

 

   

 

 

Net Unrealized Gains (Losses) on Other Securities

        1,132,460          1,154,756  

Deferred Gains or Losses on Hedges

        31,618          (743

Revaluation Reserve for Land

   *10      136,384     *10      135,297  

Foreign Currency Translation Adjustments

        (139,514        (80,968

Remeasurements of Defined Benefit Plans

        288,088          229,137  
  

 

   

 

 

Total Accumulated Other Comprehensive Income

        1,449,035          1,437,480  
  

 

   

 

 

Stock Acquisition Rights

        134          95  

Non-controlling Interests

        105,797          116,959  
  

 

   

 

 

Total Net Assets

        9,362,207          9,640,884  
  

 

   

 

 

Total Liabilities and Net Assets

        225,586,211          227,195,390  
  

 

   

 

 

 

- 4 -


(2) Interim Consolidated Statement of Income and Interim Consolidated Statement of Comprehensive Income

      Interim Consolidated Statement of Income

 

    

(Millions of yen)

 
    

For the six months ended

September 30, 2020

   

For the six months ended

September 30, 2021

 

Ordinary Income

                                            1,576,761                                              1,579,249  

Interest Income

       693,651         615,622  

Interest on Loans and Bills Discounted

       490,811         422,172  

Interest and Dividends on Securities

       122,600         119,583  

Fiduciary Income

       27,143         29,728  

Fee and Commission Income

       397,087         416,769  

Trading Income

       238,219         226,614  

Other Operating Income

       156,922         142,799  

Other Ordinary Income

   *1     63,736     *1     147,714  

Ordinary Expenses

       1,309,150         1,179,909  

Interest Expenses

       253,522         141,461  

Interest on Deposits

       91,376         28,002  

Fee and Commission Expenses

       77,475         86,326  

Trading Expenses

       1,455         35,301  

Other Operating Expenses

       68,248         59,622  

General and Administrative Expenses

       681,287         667,594  

Other Ordinary Expenses

   *2     227,161     *2     189,602  
  

 

   

 

 

Ordinary Profits

              267,610                 399,340  
  

 

   

 

 

Extraordinary Gains

   *3     72,735     *3     51,553  

Extraordinary Losses

   *4     6,955     *4     4,271  
  

 

   

 

 

Income before Income Taxes

       333,391         446,622  
  

 

   

 

 

Income Taxes:

        

Current

       74,186         65,604  

Deferred

       41,813         (10,941
  

 

   

 

 

Total Income Taxes

       116,000         54,663  
  

 

   

 

 

Profit

       217,390         391,958  
  

 

   

 

 

Profit Attributable to Non-controlling Interests

       1,867         6,301  
  

 

   

 

 

Profit Attributable to Owners of Parent

       215,523         385,657  
  

 

   

 

 

 

- 5 -


      Interim Consolidated Statement of Comprehensive Income

 

    

(Millions of yen)

 
    

For the six months ended

September 30, 2020

   

For the six months ended

September 30, 2021

 

Profit

                                          217,390                                                 391,958  

Other Comprehensive Income

       158,782                (9,048

Net Unrealized Gains (Losses) on Other Securities

              212,348         23,805  

Deferred Gains or Losses on Hedges

       (5,843       (32,261

Foreign Currency Translation Adjustments

       (36,529       50,061  

Remeasurements of Defined Benefit Plans

       (9,851       (58,390

Share of Other Comprehensive Income of Associates Accounted for Using Equity Method

       (1,341       7,736  
  

 

   

 

 

Comprehensive Income

              376,172                382,910  
  

 

   

 

 

(Breakdown)

        

Comprehensive Income Attributable to Owners of Parent

       377,963         375,995  

Comprehensive Income Attributable to Non-controlling Interests

       (1,791       6,914  

 

- 6 -


(3) Interim Consolidated Statement of Changes in Net Assets

      For the six months ended September 30, 2020

 

     (Millions of yen)  
     Shareholders’ Equity  
     Common Stock      Capital Surplus     Retained Earnings     Treasury Stock     Total
Shareholders’

Equity
 

Balance as of the beginning of the period

     2,256,767        1,136,467       4,174,190       (6,414     7,561,010  

Cumulative Effects of Changes in
Accounting Policies

          (32,639       (32,639

Balance as of the beginning of the period
reflecting Changes in Accounting
Policies

     2,256,767        1,136,467       4,141,550       (6,414     7,528,370  

Changes during the period

           

Cash Dividends

          (95,208       (95,208

Profit Attributable to Owners of
Parent

          215,523         215,523  

Repurchase of Treasury Stock

            (1,995     (1,995

Disposition of Treasury Stock

        (80       1,385       1,305  

Transfer from Revaluation Reserve
for Land

          (1,178       (1,178

Change in Treasury Shares of Parent
Arising from Transactions with
Non-controlling Shareholders

        (519         (519

Transfer from Retained Earnings to
Capital Surplus

        80       (80       —    

Net Changes in Items other than
Shareholders’ equity

           
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total Changes during the period

     —          (519     119,056       (610     117,926  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of the end of the period

     2,256,767        1,135,948       4,260,606       (7,025     7,646,297  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

    Accumulated Other Comprehensive Income     Stock
Acquisition
Rights
    Non-
controlling
Interests
    Total Net
Assets
 
    Net Unrealized
Gains (Losses)
on Other
Securities
    Deferred Gains
or Losses on
Hedges
    Revaluation
Reserve for
Land
    Foreign
Currency
Translation
Adjustments
    Remeasurements
of Defined
Benefit Plans
    Total
Accumulated
Other
Comprehensive
Income
 

Balance as of the beginning of the period  

    823,085       72,081       136,655       (133,178     94,317       992,960       213       109,662       8,663,847  

Cumulative Effects of Changes in Accounting Policies

              —             (32,639

Balance as of the beginning of the period reflecting Changes in Accounting
Policies

    823,085        72,081        136,655       (133,178       94,317        992,960       213       109,662       8,631,208  

Changes during the period

                 

Cash Dividends

                    (95,208

Profit Attributable to Owners of
Parent

                    215,523  

Repurchase of Treasury Stock

                    (1,995

Disposition of Treasury Stock

                    1,305  

Transfer from Revaluation Reserve
for Land

                    (1,178

Change in Treasury Shares of Parent Arising from Transactions with Non-controlling Shareholders

                    (519

Transfer from Retained Earnings to Capital Surplus

                    —    

Net Changes in Items other than Shareholders’ equity

    215,696       (5,819     1,178        (37,594     (9,842     163,619        (79     (7,469     156,070  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Changes during the period

    215,696       (5,819     1,178       (37,594     (9,842     163,619       (79     (7,469     273,997  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of the end of the period

    1,038,781       66,262       137,834       (170,773     84,475       1,156,580       134       102,192       8,905,205  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

- 7 -


      For the six months ended September 30, 2021

 

     (Millions of yen)  
     Shareholders’ Equity  
     Common Stock      Capital Surplus     Retained Earnings     Treasury Stock     Total
Shareholders’

Equity
 

Balance as of the beginning of the period

     2,256,767        1,135,940       4,421,655       (7,124     7,807,239  

Cumulative Effects of Changes in
Accounting Policies

          (724       (724

Balance as of the beginning of the period
reflecting Changes in Accounting
Policies

     2,256,767        1,135,940       4,420,931       (7,124     7,806,515  

Changes during the period

           

Cash Dividends

          (95,201       (95,201

Profit Attributable to Owners of
Parent

          385,657         385,657  

Repurchase of Treasury Stock

            (2,646     (2,646

Disposition of Treasury Stock

        (51       1,606       1,554  

Transfer from Revaluation Reserve
for Land

          1,086         1,086  

Change in Treasury Shares of Parent
Arising from Transactions with
Non-controlling Shareholders

        (10,616         (10,616

Transfer from Retained Earnings to
Capital Surplus

        51       (51       —    

Net Changes in Items other than
Shareholders’ equity

           
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Total Changes during the period

     —          (10,616     291,490       (1,040     279,833  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of the end of the period

     2,256,767        1,125,324       4,712,422       (8,164     8,086,349  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

    Accumulated Other Comprehensive Income                    
    Net Unrealized
Gains (Losses)
on Other
Securities
    Deferred Gains
or Losses on
Hedges
    Revaluation
Reserve for
Land
    Foreign
Currency
Translation
Adjustments
    Remeasurements
of Defined
Benefit Plans
    Total
Accumulated
Other
Comprehensive
Income
    Stock
Acquisition
Rights
    Non-
controlling
Interests
    Total Net
Assets
 

Balance as of the beginning of the period  

    1,132,460       31,618       136,384       (139,514     288,088       1,449,035       134       105,797       9,362,207  

Cumulative Effects of Changes in Accounting Policies

              —             (724

Balance as of the beginning of the period reflecting Changes in Accounting
Policies

    1,132,460       31,618       136,384       (139,514     288,088       1,449,035       134       105,797       9,361,483  

Changes during the period

                 

Cash Dividends

                    (95,201

Profit Attributable to Owners of
Parent

                    385,657  

Repurchase of Treasury Stock

                    (2,646

Disposition of Treasury Stock

                    1,554  

Transfer from Revaluation Reserve
for Land

                    1,086  

Change in Treasury Shares of Parent Arising from Transactions with Non-controlling Shareholders

                    (10,616

Transfer from Retained Earnings to Capital Surplus

                    —    

Net Changes in Items other than Shareholders’ equity

    22,295       (32,361     (1,086     58,546       (58,950     (11,555     (39     11,161        (433
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Changes during the period

    22,295       (32,361     (1,086     58,546       (58,950     (11,555     (39     11,161       279,400  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of the end of the period

    1,154,756       (743     135,297       (80,968     229,137       1,437,480       95       116,959       9,640,884  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

- 8 -


(4) Interim Consolidated Statement of Cash Flows

 

     (Millions of yen)  
     For the six months ended
September 30, 2020
    For the six months ended
September 30, 2021
 

Cash Flow from Operating Activities

          

Income before Income Taxes

        333,391          446,622  

Depreciation

        80,450          82,327  

Losses on Impairment of Fixed Assets

        1,391          2,577  

Amortization of Goodwill

        1,869          1,882  

Equity in Loss (Gain) from Investments in Affiliates

        (11,559        (16,519

Increase (Decrease) in Reserves for Possible Losses on Loans

        53,470          17,235  

Increase (Decrease) in Reserve for Possible Losses on Investments

        0          0  

Increase (Decrease) in Reserve for Possible Losses on Sales of Loans

        504          (893

Increase (Decrease) in Reserve for Contingencies

        (1,028        1,362  

Increase (Decrease) in Reserve for Bonus Payments

        (18,630        (45,632

Increase (Decrease) in Reserve for Variable Compensation

        (1,092        (1,920

Decrease (Increase) in Net Defined Benefit Asset

        (31,468        37,380  

Increase (Decrease) in Net Defined Benefit Liability

        1,180          7,462  

Increase (Decrease) in Reserve for Director and Corporate Auditor Retirement Benefits

        (308        (194

Increase (Decrease) in Reserve for Reimbursement of Deposits

        (2,646        (2,198

Increase (Decrease) in Reserve for Reimbursement of Debentures

        (1,009        (2,261

Interest Income - accrual basis

        (693,651        (615,622

Interest Expenses - accrual basis

        253,522          141,461  

Losses (Gains) on Securities

        (1,779        (55,028

Losses (Gains) on Money Held in Trust

        (1,565        (576

Foreign Exchange Losses (Gains) - net

        190,646          (94,978

Losses (Gains) on Disposition of Fixed Assets

        (588        1,242  

Losses (Gains) on Revision of Retirement Benefit Plan

        (58,684        —    

Losses (Gains) on Cancellation of Employee Retirement Benefit Trust

        (7,895        (51,093

Decrease (Increase) in Trading Assets

        (1,348,924        (18,340

Increase (Decrease) in Trading Liabilities

        (1,148,807        (1,635,601

Decrease (Increase) in Derivatives other than for Trading Assets

        513,769          307,018  

Increase (Decrease) in Derivatives other than for Trading Liabilities

        (356,773        (255,687

Decrease (Increase) in Loans and Bills Discounted

        (3,180,082        1,665,708  

Increase (Decrease) in Deposits

        3,706,210          (4,210,533

Increase (Decrease) in Negotiable Certificates of Deposit

        887,125          2,046,043  

Increase (Decrease) in Borrowed Money (excluding Subordinated Borrowed Money)

        2,040,630          51,827  

Decrease (Increase) in Due from Banks (excluding Due from Central Banks)

        58,994          (261,460

Decrease (Increase) in Call Loans, etc.

        6,119,257          (4,925,790

Decrease (Increase) in Guarantee Deposits Paid under Securities Borrowing Transactions

        52,362          295,085  

Increase (Decrease) in Call Money, etc.

        1,321,413          3,660,343  

Increase (Decrease) in Commercial Paper

        521,600          (159,028

Increase (Decrease) in Guarantee Deposits Received under Securities Lending Transactions

        136,184          271,038  

Decrease (Increase) in Foreign Exchange Assets

        96,730          (139,049

Increase (Decrease) in Foreign Exchange Liabilities

        (107,635        (31,586

Increase (Decrease) in Short-term Bonds (Liabilities)

        (42,210        87,515  

Increase (Decrease) in Bonds and Notes

        506,833          73,621  

Increase (Decrease) in Due to Trust Accounts

        280,752          21,655  

Interest and Dividend Income - cash basis

        768,705          697,501  

Interest Expenses - cash basis

                 (333,961                 (178,443

Other - net

        (200,012        875,912  
  

 

 

   

 

 

 

Subtotal

        10,376,684          (1,909,617
  

 

 

   

 

 

 

Cash Refunded (Paid) in Income Taxes

        (131,734        (92,701
  

 

 

   

 

 

 

Net Cash Provided by (Used in) Operating Activities

               10,244,949          (2,002,318
  

 

 

   

 

 

 

 

- 9 -


     (Millions of yen)  
     For the six months ended
September 30, 2020
    For the six months ended
September 30, 2021
 

Cash Flow from Investing Activities

          

Payments for Purchase of Securities

        (48,153,087        (58,427,590

Proceeds from Sale of Securities

        24,703,651          30,635,786  

Proceeds from Redemption of Securities

        14,798,919          28,645,491  

Payments for Increase in Money Held in Trust

        (63,426        (61,361

Proceeds from Decrease in Money Held in Trust

        4,841          6,119  

Payments for Purchase of Tangible Fixed Assets

        (36,629        (11,779

Payments for Purchase of Intangible Fixed Assets

        (47,263        (43,042

Proceeds from Sale of Tangible Fixed Assets

        12,855          2,326  

Proceeds from Sale of Intangible Fixed Assets

        —            480  

Proceeds from Sales of Stocks of Subsidiaries (affecting the scope of consolidation)

        497          —    
  

 

 

   

 

 

 

Net Cash Provided by (Used in) Investing Activities

        (8,779,640        746,430  
  

 

 

   

 

 

 

Cash Flow from Financing Activities

          

Proceeds from Subordinated Borrowed Money

        30,000          —    

Repayments of Subordinated Borrowings

        —            (4,000

Proceeds from Issuance of Subordinated Bonds

        287,000          140,950  

Payments for Redemption of Subordinated Bonds

        (50,000        (35,000

Proceeds from Investments by Non-controlling Shareholders

        2,543          34  

Repayments to Non-controlling Shareholders

        —            (96

Cash Dividends Paid

        (95,242        (95,198

Cash Dividends Paid to Non-controlling Shareholders

        (4,074        (7,014

Payments for Repurchase of Treasury Stock

        (1,503        (1,825

Proceeds from Sale of Treasury Stock

        838          869  

Payments for Repurchase of Treasury Stock of Subsidiaries

        (5,414        (0
  

 

 

   

 

 

 

Net Cash Provided by (Used in) Financing Activities

        164,147          (1,281
  

 

 

   

 

 

 

Effect of Foreign Exchange Rate Changes on Cash and Cash Equivalents

        (120,684        71,025  
  

 

 

   

 

 

 

Net Increase (Decrease) in Cash and Cash Equivalents

        1,508,771          (1,186,144
  

 

 

   

 

 

 

Cash and Cash Equivalents at the beginning of the period

        39,863,604          46,981,399  
  

 

 

   

 

 

 

Cash and Cash Equivalents at the end of the period

     *1          41,372,376       *1          45,795,255  
  

 

 

   

 

 

 

 

- 10 -


Notes to Interim Consolidated Financial Statements

Fundamental and Important Matters for the Preparation of Interim Consolidated Financial Statements

 

1.

Scope of Consolidation

 

(1)

Number of consolidated subsidiaries: 160

Names of principal companies:

Mizuho Bank, Ltd.

Mizuho Trust & Banking Co., Ltd.

Mizuho Securities Co., Ltd.

Change in scope of consolidation

During the six months ended September 30, 2021, Mizuho Growth Fund No.4 Limited Partnership and eight other companies were newly included in the scope of consolidation as a result of establishment.

During the six months ended September 30, 2021, Mizuho Australia Ltd. and eight other companies were excluded from the scope of consolidation as a result of liquidation and other factors.

 

(2)

Number of non-consolidated subsidiaries: 0

 

2.

Application of the Equity Method

 

(1)

Number of non-consolidated subsidiaries under the equity method: 0

 

(2)

Number of affiliates under the equity method: 29

Names of principal companies:

Custody Bank of Japan, Ltd.

Orient Corporation

Mizuho Leasing Company, Limited

Change in scope of equity method

During the six months ended September 30, 2021, Cotra Ltd. was newly included in the scope of equity method as a result of establishment.

 

(3)

Number of non-consolidated subsidiaries not under the equity method: 0

 

(4)

Affiliates not under the equity method:

Pec International Leasing Co., Ltd.

Affiliates not under the equity method are excluded from the scope of the equity method since such exclusion has no material effect on MHFG’s interim consolidated financial statements in terms of Net Income (Loss) (amount corresponding to MHFG’s equity position), Retained Earnings (amount corresponding to MHFG’s equity position), Accumulated Other Comprehensive Income (amount corresponding to MHFG’s equity position) and others.

 

3.

Interim Balance Sheet Dates of Consolidated Subsidiaries

 

(1)

Interim balance sheet dates of consolidated subsidiaries are as follows:

 

June 30    39 companies   
September 30    121 companies   

 

(2)

Consolidated Subsidiaries were consolidated based on their interim financial statements as of and for the period ended their respective interim balance sheet dates.

The necessary adjustments have been made to the interim financial statements for any significant transactions that took place between their respective interim balance sheet dates and the date of the interim consolidated financial statements.

 

- 11 -


4.

Standards of Accounting Method

 

(1)

Credited Loans pursuant to Trading Securities and Trading Income & Expenses

Credited loans held for the purpose of trading are, in line with trading securities, recognized on a trade date basis and recorded in Other Debt Purchased on the interim consolidated balance sheet. Other Debt Purchased related to the relevant credited loans is stated at fair value at the interim consolidated balance sheet date. Interest received and the gains or losses on the sale of the relevant credited loans during the six months ended September 30, 2021, including the gains or losses resulting from any change in the value between the beginning and the end of the six months ended September 30, 2021, are recognized in Other Operating Income and Other Operating Expenses on the interim consolidated statement of income.

 

(2)

Trading Assets & Liabilities and Trading Income & Expenses

Trading transactions intended to take advantage of short-term fluctuations and arbitrage opportunities in interest rates, currency exchange rates, market prices of securities and related indices are recognized on a trade date basis and recorded in Trading Assets or Trading Liabilities on the interim consolidated balance sheet. Income or expenses generated on the relevant trading transactions are recorded in Trading Income or Trading Expenses on the interim consolidated statement of income.

Securities and other monetary claims held for trading purposes are stated at fair value at the interim consolidated balance sheet date. Derivative financial products, such as swaps, futures and option transactions, are stated at fair value, assuming that such transactions are terminated and settled at the interim consolidated balance sheet date.

Trading Income and Trading Expenses include the interest received and the interest paid during the six months ended September 30, 2021, the gains or losses resulting from any change in the value of securities and other monetary claims between the beginning and the end of the six months ended September 30, 2021, and the gains or losses resulting from any change in the value of financial derivatives between the beginning and the end of the six months ended September 30, 2021, assuming they were settled at the end of the six months ended September 30, 2021.

For financial derivatives, fair value is calculated on the basis of net assets or liabilities after offsetting financial assets and liabilities with respect to specific market risks and specific credit risk.

 

(3)

Securities

 

  (a)

Bonds held to maturity are stated at amortized cost (straight-line method) and determined by the moving average method. Investments in affiliates not under the equity method are stated at acquisition cost and determined by the moving average method. Other Securities are stated at market price (cost of securities sold is calculated primarily by the moving average method). Stocks and others without a quoted market price are stated at acquisition cost and determined by the moving average method.

The net unrealized gains (losses) on Other Securities are included directly in Net Assets, net of applicable income taxes after excluding gains and losses as a result of the fair-value hedge method.

 

  (b)

Securities which are held as trust assets in Money Held in Trust accounts are valued in the same way as described in (a) above.

 

(4)

Derivative Transactions

Derivative transactions (other than transactions for trading purposes) are valued at fair value.

Fair value is calculated on the basis of net assets or liabilities after offsetting financial assets and liabilities with respect to specific market risks and specific credit risk.

 

(5)

Depreciation of Fixed Assets

 

  1)

Tangible Fixed Assets (Except for Lease Assets)

Depreciation of buildings is computed mainly by the straight-line method, and that of others is computed mainly by the declining-balance method. The amount based on estimated annual depreciation expenses is allocated to each period.

The range of useful lives is as follows:

 

Buildings

   3 years to 50 years   

Others

   2 years to 20 years   

 

- 12 -


  2)

Intangible Fixed Assets (Except for Lease Assets)

Amortization of Intangible Fixed Assets is computed by the straight-line method. Development costs for internally-used software are capitalized and amortized over their estimated useful lives of mainly from five to ten years as determined by MHFG and consolidated subsidiaries.

 

  3)

Lease Assets

Depreciation of lease assets booked in Tangible Fixed Assets and Intangible Fixed Assets which are concerned with finance lease transactions that do not transfer ownership is mainly computed by the same method as the one applied to fixed assets owned by us.

 

(6)

Deferred Assets

Bond issuance costs are expensed as incurred.

 

(7)

Reserves for Possible Losses on Loans

Reserves for Possible Losses on Loans of major domestic consolidated subsidiaries are maintained in accordance with internally established standards for write-offs and reserve provisions.

For claims extended to obligors that are legally bankrupt under the Bankruptcy Law, Special Liquidation under the Company Law or other similar laws (“Bankrupt Obligors”), and to obligors that are effectively in similar conditions (“Substantially Bankrupt Obligors”), reserves are maintained at the amounts of claims net of direct write-offs described below and the expected amounts recoverable from the disposition of collateral and the amounts recoverable under guarantees. For claims extended to obligors that are not yet legally or formally bankrupt but are likely to be bankrupt (“Intensive Control Obligors”), reserves are maintained at the amounts deemed necessary based on overall solvency analyses of the amounts of claims net of expected amounts recoverable from the disposition of collateral and the amounts recoverable under guarantees.

For claims extended to Intensive Control Obligors and Obligors with Restructured Loans and others, if the exposure to an obligor exceeds a certain specific amount, reserves are provided as follows: (i) if future cash flows of the principal and interest can be reasonably estimated, the discounted cash flow method is applied, under which the reserve is determined as the difference between the book value of the loan and its present value of future cash flows discounted using the contractual interest rate before the loan was classified as a Restructured Loan, and (ii) if future cash flows of the principal and interest cannot be reasonably estimated, reserves are provided for the losses estimated for each individual loan.

For claims extended to other obligors, reserves for the next one year or three years are maintained at rates derived from historical credit loss experience or historical bankruptcy experience for one or three years and making necessary adjustments such as future prospects and others. Reserve for Possible Losses on Loans to Restructuring Countries is maintained in order to cover possible losses based on analyses of the political and economic climates of the countries.

All claims are assessed by each claim origination department in accordance with the internally established “Self-assessment Standard,” and the results of the assessments are verified and examined by the independent examination departments.

In the case of claims to Bankrupt Obligors and Substantially Bankrupt Obligors, which are collateralized or guaranteed by a third party, the amounts deemed uncollectible (calculated by deducting the anticipated proceeds from the sale of collateral pledged against the claims and amounts that are expected to be recovered from guarantors of the claims) are written off against the respective claims balances. The total directly written-off amount was ¥113,626 million (¥116,834 million at the end of the fiscal year ended March 31, 2021).

Other consolidated subsidiaries provide the amount necessary to cover the loan losses based upon past experience and other factors for general claims and the assessment for each individual loan for other claims.

 

- 13 -


(Additional Information)

In light of the principles set forth in the report entitled “Japanese Financial Services Agency (“JFSA”)’s supervisory approaches to lending business and loan loss provisioning” published by JFSA in December 18, 2019, we have reflected the potential impact of the spread of COVID-19 and its prolongation on Reserves for Possible Losses on Loans for some credit. More specifically, we have estimated the expected loss amount that reflects the impact of the prolongation of COVID-19. The estimate includes the future prospect of business environment of each industry and the forecasted GDP growth rate as major assumptions. There are no material changes in the methods of the above accounting estimates and the major assumptions used in the interim consolidated financial statements from those of the previous fiscal year.

 

(8)

Reserve for Possible Losses on Investments

Reserve for Possible Losses on Investments is maintained to provide against possible losses on investments in securities, after taking into consideration the financial condition and other factors concerning the investee company.

 

(9)

Reserve for Bonus Payments

Reserve for Bonus Payments, which is provided for future bonus payments to employees, is maintained at the amount accrued at the end of the six months ended September 30, 2021, based on the estimated future payments.

 

(10)

Reserve for Variable Compensation

To prepare for the payments of performance payments and stock compensation to be paid as variable compensation within compensation for directors, group executive officers and operating officers of Mizuho Financial Group, Inc., Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd., Mizuho Securities Co., Ltd., and certain consolidated subsidiaries, the amount accrued at the end of the six months ended September 30, 2021 among the estimated payments based on the standard amount regarding variable compensation of the fiscal year ending March 31, 2021 is provided.

 

(11)

Reserve for Director and Corporate Auditor Retirement Benefits

Reserve for Director and Corporate Auditor Retirement Benefits, which is provided for future retirement benefit payments to directors, corporate auditors, and executive officers, is recognized at the amount accrued by the end of the six months ended September 30, 2021, based on the internally established standards.

 

(12)

Reserve for Possible Losses on Sales of Loans

Reserve for Possible Losses on Sales of Loans is provided for possible future losses on sales of loans at the amount deemed necessary based on a reasonable estimate of possible future losses.

 

(13)

Reserve for Contingencies

Reserve for Contingencies is maintained to provide against possible losses from contingencies which are not covered by other specific reserves. The balance is an estimate of possible future losses considered to require a reserve.

 

(14)

Reserve for Reimbursement of Deposits

Reserve for Reimbursement of Deposits is provided against the losses for the deposits derecognized from liabilities at the estimated amount of future claims for withdrawal by depositors.

 

(15)

Reserve for Reimbursement of Debentures

Reserve for Reimbursement of Debentures is provided for the debentures derecognized from liabilities at the estimated amount for future claims.

 

(16)

Reserve under Special Laws

Reserve under Special Laws is Reserve for Contingent Liabilities from Financial Instruments and Exchange. This is the reserve pursuant to Article 46-5 of the Financial Instruments and Exchange Law and Article 175 of the Cabinet Office Ordinance regarding Financial Instruments Business, etc. to indemnify the losses incurred from accidents in the purchase and sale of securities, other transactions or derivative transactions.

 

- 14 -


(17)

Accounting Method for Retirement Benefits

In calculating retirement benefit obligations, a benefit formula basis is used as a method of attributing expected retirement benefits to the period up to the end of the six months ended September 30, 2021. Unrecognized prior service cost and unrecognized actuarial differences are recognized as follows:

Unrecognized prior service cost: Recognized mainly as income or expenses in the period of occurrence.

Unrecognized actuarial difference: Recognized as income or expenses from the following fiscal year under the straight-line method over a certain term within the average remaining service period of the employees (mainly 10 years) of the respective fiscal years.

Certain consolidated subsidiaries apply the simplified method that assumes the amount required for voluntary resignation at the end of the six months ended September 30, 2021 to be retirement benefit obligations in computing net defined benefit liability and retirement benefit expenses.

 

(18)

Revenues

Securities-related business fees mainly consist of brokerage fees and commissions, and asset-based revenues. Brokerage fees and commissions include fees earned from the execution of customer transactions and sales commissions of stocks, bonds and investment trusts, which are recognized at the point in time on transaction date with the customer. Asset-based revenues include fees received from investment trust management companies in return for administration services, such as record keeping services, of investment trusts, which are recognized over time in the period when the related service is provided.

Deposits and Lending business fees consist of Deposit-related fees and Lending-related fees. Deposit related fees are within the scope of “Accounting Standard for Revenue Recognition”, while most of Lending-related fees such as commitment fees and arrangement fees are not. Deposit-related fees include account transfer fees, which are recognized at the point in time on transaction date with the customer or at the point in time when the related service is provided.

Remittance business fees include service charges for domestic and international funds transfers and collections, which are recognized at the point in time when the related service is provided.

Trust-related business fees mainly consist of brokerage commissions of real estate property, consulting fees of real estate property and charged of stock transfer agent services. Brokerage commissions of real estate property are commissions that are received as consideration for services related to real estate brokerage, and are recognized in principle at the time of the conclusion of a sales contract for the subject real estate or trust beneficiary rights. Consulting fees of real estate property are commissions that are received as consideration for services related to real estate consulting, which are recognized at the point in time when the related service is provided or over time in the period when the related service is provided. Stock transfer agent service fees are commissions that are received as consideration for services related to transfer agent business and associated services, which are recognized at the point in time when the related service is provided or over time in the period when the related service is provided.

Agency business fees mainly consist of administration service fees related to MHFG Group’s agency business such as Japan’s principal public lottery program and revenues from standing proxy services related to stocks and others, which are recognized at the point in time when the related service is provided or over time in the period when the related service is provided.

Fees for other customer services include various revenues such as sales commissions of life insurance, service charges for electronic banking, financial advisory fees, and service charges for software development. Sales commissions of life insurance are received in return for selling insurance products and recognized mainly at the point in time on transaction date with the customer. Service charges for electronic banking are mainly monthly basic usage fees and recognized over time in the period when the related service is provided. Financial advisory fees are received as consideration for services supporting market research and business strategy planning, which are recognized over time in the period when the related service is provided. Service charges for software development are recognized mainly over time in the period when the related service is provided.

 

- 15 -


Fiduciary income mainly consists of trust fees earned through fiduciary asset management and administrative service, which are recognized at the point on creation of the trust or completion date specified in the contract, or over time in the period when the related service is provided.

Part of other ordinary income include underwriting fees from trading securities, credit card interchange fees and asset management business fees which are within the scope of “Accounting Standard for Revenue Recognition”. Underwriting fees are recognized at the point on the date which all the consideration of the transaction are fixed. Credit card interchange fees are recognized at the point on the settlement of the credit card payment transactions. Asset management business fees consist of investment trust management fees and investment advisory fees for investment trusts, which are recognized over time in the period when the related service is provided.

 

(19)

Assets and Liabilities denominated in foreign currencies

Assets and liabilities denominated in foreign currencies and accounts of overseas branches of domestic consolidated banking subsidiaries and a domestic consolidated trust banking subsidiary are translated into Japanese yen primarily at the exchange rates in effect at the interim consolidated balance sheet date, with the exception of the investments in affiliates not under the equity method, which are translated at historical exchange rates.

Assets and liabilities denominated in foreign currencies of the consolidated subsidiaries, except for the transactions mentioned above, are translated into Japanese yen primarily at the exchange rates in effect at the respective interim balance sheet dates.

 

(20)

Hedge Accounting

 

  (a)

Interest Rate Risk

The deferred method, the fair-value hedge method or the exceptional accrual method for interest rate swaps are applied as hedge accounting methods.

The portfolio hedge transaction for a large volume of small-value monetary claims and liabilities of domestic consolidated banking subsidiaries and domestic consolidated trust banking subsidiaries is accounted for in accordance with the method stipulated in the “Accounting and Auditing Treatment relating to Adoption of Accounting Standards for Financial Instruments for Banks” (JICPA Industry Committee Practical Guideline No.24, October 8, 2020).

The effectiveness of hedging activities for the portfolio hedge transaction for a large volume of small-value monetary claims and liabilities is assessed as follows:

 

  i)

as for hedging activities to offset market fluctuation risks, the effectiveness is assessed by bracketing both the hedged instruments, such as deposits and loans, and the hedging instruments, such as interest-rate swaps, in the same maturity bucket.

 

  ii)

as for hedging activities to fix the cash flows, the effectiveness is assessed based on the correlation between a base interest rate index of the hedged instrument and that of the hedging instrument.

The effectiveness of the individual hedge is assessed based on the comparison of the fluctuation in the market or of cash flows of the hedged instruments with that of the hedging instruments.

 

  (b)

Foreign Exchange Risk

Domestic consolidated banking subsidiaries and domestic consolidated trust banking subsidiaries apply the deferred method of hedge accounting to hedge foreign exchange risks associated with various financial assets and liabilities denominated in foreign currencies as stipulated in the “Accounting and Auditing Treatment relating to Adoption of Accounting Standards for Foreign Currency Transactions for Banks” (JICPA Industry Committee Practical Guideline No.25, October 8, 2020). The effectiveness of the hedge is assessed by confirming that the amount of the foreign currency position of the hedged monetary claims and liabilities is equal to or larger than that of currency-swap transactions, exchange swap transactions, and similar transactions designated as the hedging instruments of the foreign exchange risk.

In addition to the above methods, these subsidiaries apply the deferred method or the fair-value hedge method to portfolio hedges of the foreign exchange risks associated with investments in subsidiaries and affiliates in foreign currency and Other Securities in foreign currency (except for bonds) identified as hedged items in advance, as long as the amount of foreign currency payables of spot and forward foreign exchange contracts exceeds the amount of acquisition cost of the hedged foreign securities in foreign currency.

 

- 16 -


  (c)

Inter-company Transactions

Inter-company interest rate swaps, currency swaps and similar derivatives among consolidated companies or between trading accounts and other accounts, which are designated as hedges, are not eliminated, and related gains and losses are recognized in the statement of income or deferred under hedge accounting, because these inter-company derivatives are executed according to the criteria for appropriate outside third-party cover operations which are treated as hedge transactions objectively in accordance with JICPA Industry Committee Practical Guideline No. 24 and 25.

As for certain assets and liabilities of MHFG and its consolidated subsidiaries, the deferred method, the fair-value hedge method or the exceptional accrual method for interest rate swaps are applied.

 

  (d)

Hedging relationships which apply “Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR”

Among above (a) to (c), all hedging relationships included in the scope of applying the “Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR” (ASBJ Practical Solutions No.40, September 29, 2020) are subject to this exceptional treatment. The detail of the hedging relationships which apply the treatment are as follows.

Hedging method: the deferred method, the fair-value hedge method or the exceptional accrual method

Hedging instruments: interest-rate swaps, currency-swap transactions or exchange swap transactions, etc

Hedged instruments: financial assets and liabilities, financial assets and liabilities denominated in foreign currencies, etc

The variety of Hedge transactions: to offset market fluctuation risks, to fix the cash flows

 

(21)

Scope of Cash and Cash Equivalents on Interim Consolidated Statements of Cash Flows

In the interim consolidated statements of cash flows, Cash and Cash Equivalents consist of cash and due from central banks included in “Cash and Due from Banks” on the interim consolidated balance sheet.

 

(22)

Adoption of the Consolidated Taxation System

MHFG and some domestic consolidated subsidiaries of the Group have applied the Consolidated Taxation System from the beginning of the interim period ended September 30, 2021.

Changes in Accounting Policies

(Accounting Standard for Revenue Recognition and Others)

MHFG has applied “Accounting Standard for Revenue Recognition” (ASBJ Statement No.29, March 31, 2020) and others from the beginning of the interim period ended September 30, 2021.

In accordance with “Accounting Standard for Revenue Recognition”, MHFG recognizes revenue at the time of the transfer of promised goods or services to the customer in an amount that reflects the consideration to which MHFG expects to be entitled in exchange for those goods or services.

In accordance with transitional treatment set out in the proviso of Article 84 of “Accounting Standard for Revenue Recognition”, the cumulative effects arising from the retroactive application of these new accounting policies to all the previous fiscal years were reflected in Retained Earnings as of April 1, 2021, and the new accounting policies are applied from the beginning of the fiscal year.

As a result of the cumulative effects arising from the retroactive application of these new accounting policies, Retained Earnings of the interim consolidated statement of changes in net assets decreased by ¥724 million as of April 1, 2021. The impact on the interim consolidated balance sheet, the interim consolidated statement of income, interim consolidated statement of cash flows and per share information for the interim period ended September 30, 2021 is immaterial.

And in accordance with the transitional treatment set forth in Article 89-3 of “Accounting Standard for Revenue Recognition”, comparative period is not noted in “Revenue recognition”.

 

- 17 -


Additional Information

The Board Benefit Trust (“BBT”) Program

Since MHFG operates its business to contribute to the creation of value for diverse stakeholders and realize improved corporate value through the continuous and stable growth of MHFG group pursuant to MHFG’s basic management policy defined under the Mizuho Financial Group’s Corporate Identity, MHFG has introduced a stock compensation program using a trust (the “Program”) that functions as an incentive for each Director, Group Executive Officer, and Operating officers to exert maximum effort in performing his or her duties, and also as consideration for such exertion of effort.

 

(1)

Outline of the Program

The Program has adopted the Board Benefit Trust (“BBT”) framework. MHFG’s shares on the stock market will be acquired through a trust established based on the underlying funds contributed by MHFG, and MHFG’s shares will be distributed to Directors, Executive Officers, and Operating officers of MHFG, Mizuho Bank, Ltd., Mizuho Trust & Banking Co., Ltd., and Mizuho Securities Co., Ltd. (the “Company Group”) and other entities in accordance with the Rules on Distribution of Shares to be prescribed in advance. The framework consists of the stock compensation program based on the Company Group Officer’s responsibilities and others in their respective company (“Stock Compensation I”), the stock compensation program based on the performance evaluation of the Company Group (“Stock Compensation II”) and the stock compensation program based on Company Group Officer’s responsibilities in their respective company and the performance evaluation of the Company Group, which distributes MHFG’s shares to Operating officers of MHFG and certain consolidated subsidiaries (“Stock Benefit”).

Stock Compensation I will be paid at the time of retirement in the form of shares of MHFG calculated based on their responsibilities and others. A system is adopted which enables a decrease or forfeiture of the amount depending on the performance of the company or the individual.

Stock Compensation II will be paid in the form of shares of MHFG and will be deferred over three years, which is calculated based on the status of achieving our Five-Year Business Plan. A system is adopted which enables a decrease or forfeiture of the amount depending on the performance of the company or the individual.

Stock Benefit will be paid in the collective form of MHFG’s share which is based on responsibilities in their respective company and the performance evaluation of the Company Group. Reduction and forfeit of the benefit can be occurred in the program.

Upon the payment of stock compensation under the Program, MHFG may, for a certain portion, pay a monetary amount equivalent to the market value of its stock in lieu of stock compensation in accordance with the Rules on Distribution of Shares.

Voting rights related to MHFG’s shares belonging to the trust assets under the trust shall not be exercised.

 

(2)

MHFG’s Shares Outstanding in the Trust

MHFG’s shares outstanding in the trust are recognized as Treasury Stock under Net Assets at the carrying amount (excluding the amount of incidental expenses) in the trust. The carrying amount of such Treasury Stock as of September 30, 2021 was ¥4,950 million for 3,080 thousand shares (the carrying amount as of March 31, 2021 was ¥4,144 million for 2,554 thousand shares).

Application of tax-effect accounting to the Transition from the Consolidated Taxation System to the Group Aggregation System

MHFG and some domestic consolidated subsidiaries of the Group record amounts of deferred tax assets and deferred tax liabilities based on the provisions of tax laws prior to amendment under the treatment in Paragraph 3 of “Treatment of the application of the tax-effect accounting in relation to the transition from the consolidated tax system to the aggregate group system” (Practical Solutions No.39 March 31, 2020), without applying the provisions of Paragraph 44 of “Guidance on Accounting Standard for tax-effect accounting” (Implementation Guidance No.28 February 16, 2018), regarding the tax items for which review of the non-consolidated Tax Payment System was implemented in accordance with the transition to the aggregated group system established under the “Act for Partial Revision of the Income Tax Act, etc.” (Act No. 8 of 2020) and the transition to the aggregated group system.

 

- 18 -


Notes to Interim Consolidated Balance Sheet

 

*1.

The total amount of shares and investments in affiliates

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Shares

          348,355             369,717  

Investments

     537        539  

 

  2.

MHFG does not have unsecured loaned securities which the borrowers have the right to sell or repledge.

In certain transactions, MHFG has the right to sell or repledge the following unsecured borrowed securities, securities purchased under resale agreements and securities borrowed with cash collateral.

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Securities repledged

     13,417,819        14,413,874  

Securities neither repledged nor re-loaned at the end of the period/the fiscal year

     1,520,936        3,366,439  

 

*3.

Loans to Bankrupt Obligors and Non-Accrual Delinquent Loans, which are included in Loans and Bills Discounted, are as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Loans to Bankrupt Obligors

     19,554        23,211  

Non-Accrual Delinquent Loans

          415,318             329,493  

Loans to Bankrupt Obligors are loans, excluding loans written-off, on which delinquencies in payment of principal and/or interest have continued for a significant period of time or for some other reason there is no prospect of collecting principal and/or interest (“Non-Accrual Loans”), as per Article 96, Paragraph 1, Item 3, Subsections 1 to 5 or Item 4 of the Corporate Tax Law Enforcement Ordinance (Government Ordinance No. 97, 1965).

Non-Accrual Delinquent Loans represent Non-Accrual Loans other than (i) Loans to Bankrupt Obligors and (ii) loans on which interest payments have been deferred in order to assist or facilitate the restructuring of the obligors.

 

*4.

Balance of Loans Past Due for Three Months or More, which is included in Loans and Bills Discounted, is as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Loans Past Due for Three Months or More

                 534                    1,126  

Loans Past Due for Three Months or More are loans on which payments of principal and/or interest have not been made for a period of three months or more since the next day following the first due date without such payments, and which are not included in Loans to Bankrupt Obligors, or Non-Accrual Delinquent Loans.

 

- 19 -


*5.

Balance of Restructured Loans, which is included in Loans and Bills Discounted, is as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Restructured Loans

          377,049             457,085  

Restructured Loans represent loans whose contracts were amended in favor of obligors (e.g., reduction of, or exemption from, stated interest, deferral of interest payments, extension of maturity dates and renunciation of claims) in order to assist or facilitate the restructuring of the obligors. Loans to Bankrupt Obligors, Non-Accrual Delinquent Loans and Loans Past Due for Three Months or More are not included.

 

*6.

Total balance of Loans to Bankrupt Obligors, Non-Accrual Delinquent Loans, Loans Past Due for Three Months or More, and Restructured Loans is as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Total

          812,457             810,916  

The amounts given in *3 through *6 above are gross amounts before deduction of amounts for the Reserves for Possible Losses on Loans.

 

*7.

In accordance with Committee Practical Guideline No. 24, bills discounted are accounted for as financing transactions. The banking subsidiaries have rights to sell or pledge these commercial bills, foreign exchange bills purchased and others. The face values of these bills are as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  
          1,614,811             1,677,322  

 

- 20 -


*8.

Breakdown of assets pledged as collateral is as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

The following assets are pledged as collateral:

     

Trading Assets

     2,217,478        3,327,058  

Securities

     6,913,993        9,726,415  

Loans and Bills Discounted

     10,142,050        9,720,854  
  

 

 

    

 

 

 

Total

     19,273,522        22,774,328  

The following liabilities are collateralized by the above assets:

     

Deposits

     764,255        810,945  

Payables under Repurchase Agreements

     6,333,580        9,366,306  

Guarantee Deposits Received under Securities Lending Transactions

     935,121        1,931,774  

Borrowed Money

     6,282,906        6,379,874  

In addition to the above, the following items are pledged as collateral in connection with the settlement accounts of foreign and domestic exchange transactions or derivatives transactions and others or as a substitute for margins for futures transactions and others:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Cash and Due from Banks

     63,463        59,280  

Trading Assets

     179,925        334,445  

Securities

       3,353,832          3,514,555  

Loans and Bills Discounted

     99,964        82,181  

Other Assets includes margins for futures transactions, guarantee deposits, and collateral pledged for financial instruments and others as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Margins for Futures Transactions

     185,323        300,897  

Guarantee Deposits

     110,674        109,487  

Collateral Pledged for Financial Instruments and Others

       1,886,061          1,663,523  

 

- 21 -


*9.

Overdraft protection on current accounts and contracts of the commitment line for loans are contracts by which banking subsidiaries are bound to extend loans up to a prearranged amount, at the request of customers, unless the customer is in breach of contract conditions. The unutilized balance of these contracts amounts is as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Unutilized balance

     107,724,379        101,924,846  

Amount relating to contracts of which the original contractual maturity is one year or less, or which are unconditionally cancelable at any time

     80,332,843        73,933,105  

Since many of these contracts expire without being exercised, the unutilized balance itself does not necessarily affect future cash flows. A provision is included in many of these contracts that entitles the banking subsidiaries to refuse the execution of loans, or reduce the maximum amount under contracts when there is a change in the financial situation, necessity to preserve a claim or other similar reasons. The banking subsidiaries require collateral such as real estate and securities when deemed necessary at the time the contract is entered into. In addition, they periodically monitor customers’ business conditions in accordance with internally established standards and take necessary measures to manage credit risks such as amendments to contracts.

 

*10.

In accordance with the Land Revaluation Law (Proclamation No. 34 dated March 31, 1998), land used for business operations of domestic consolidated banking subsidiaries was revalued. The applicable income taxes on the entire excess of revaluation are included in Deferred Tax Liabilities for Revaluation Reserve for Land under Liabilities, and the remainder, net of applicable income taxes, is stated as Revaluation Reserve for Land included in Net Assets.

Revaluation date: March 31, 1998

Revaluation method as stated in Article 3, Paragraph 3 of the above law: Land used for business operations was revalued by calculating the value on the basis of the valuation by road rating stipulated in Article 2, Paragraph 4 of the Enforcement Ordinance relating to the Land Revaluation Law (Government Ordinance No. 119 promulgated on March 31, 1998) with reasonable adjustments to compensate for sites with long depth and other factors, and also on the basis of the appraisal valuation stipulated in Paragraph 5.

 

*11.

Accumulated Depreciation of Tangible Fixed Assets

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Accumulated Depreciation

            875,674               894,876  

 

*12.

Borrowed Money includes subordinated borrowed money with a covenant that performance of the obligation is subordinated to that of other obligations.

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Subordinated Borrowed Money

          213,000             209,000  

 

- 22 -


*13.

Bonds and Notes includes subordinated bonds.

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Subordinated Bonds

           3,796,982          3,907,591  

 

  14.

The principal amounts of money trusts with contracts indemnifying the principal amounts, which are entrusted to domestic consolidated trust banking subsidiaries, are as follows:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Money trusts

            842,669           832,615  

 

*15.

Liabilities for guarantees on corporate bonds included in “Securities,” which are issued by private placement (Article 2, Paragraph 3 of the Financial Instruments and Exchange Act)

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

    

           1,407,731          1,269,509  

 

- 23 -


Notes to Interim Consolidated Statement of Income

 

*1.

Other Ordinary Income includes the following:

 

     (Millions of yen)  
     For the six months ended
September 30, 2020
     For the six months ended
September 30, 2021
 

Gains on Sales of Stocks

     44,129        116,459  

Share of profit of entities accounted for using equity method

     11,559        16,519  

 

*2.

Other Ordinary Expenses includes the following:

 

     (Millions of yen)  
     For the six months ended
September 30, 2020
     For the six months ended
September 30, 2021
 

Losses on Sales of Stocks

     24,008        80,931  

Provision for Reserves for Possible Losses on Loans

     76,704        52,686  

 

*3.

Extraordinary Gains includes the following:

 

     (Millions of yen)  
     For the six months ended
September 30, 2020
     For the six months ended
September 30, 2021
 

Gains on Cancellation of Employee Retirement Benefit Trust

     7,895        51,093  

Accumulation (Amortization) of Unrecognized Prior Service Cost

     62,004        —    

“Accumulation (Amortization) of Unrecognized Prior Service Cost” resulted from prior service cost incurred in connection with the revision of the retirement benefit plan.

 

*4.

Extraordinary Losses is as follows:

 

     (Millions of yen)  
     For the six months ended
September 30, 2020
     For the six months ended
September 30, 2021
 

Losses on Impairment of Fixed Assets

     1,391        2,577  

Losses on Disposition of Fixed Assets

     2,243        1,693  

Losses on Transfer to Defined Contribution Pension Plan

     3,320        —    

“Losses on Transfer to Defined Contribution Pension Plan” resulted from the transfer of part of the defined benefit pension plan to the defined contribution pension plan.

 

- 24 -


Notes to Interim Consolidated Statement of Changes in Net Assets

For the six months ended September 30, 2020

 

1.

Types and number of issued shares and of treasury stock are as follows:

 

     (Thousands of shares)  
     As of
April 1, 2020
     Increase during
the period
     Decrease during
the period
     As of
September 30, 2020
     Remarks  

Issued Shares

              

Common Stock

     25,392,498        —          —          25,392,498     
  

 

 

    

 

 

    

 

 

    

 

 

    

Total

     25,392,498        —          —          25,392,498     
  

 

 

    

 

 

    

 

 

    

 

 

    

Treasury Stock

              

Common Stock

     32,106        14,344        7,768        38,683        (Note
  

 

 

    

 

 

    

 

 

    

 

 

    

Total

     32,106        14,344        7,768        38,683     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

(Note)      Increases are due to acquisition of treasury stock by BBT trust account (10,958 thousand shares), and repurchase of shares constituting less than one unit and other factors (3,386 thousand shares). Decreases are due to distribution and sale of treasury stock through BBT trust account (5,030 thousand shares), exercise of stock acquisition rights (stock options) (420 thousand shares) and other factors. The number of shares as of September 30, 2020 includes the number of treasury stock held by BBT trust account (25,564 thousand shares).

 

2.

Stock acquisition rights and treasury stock acquisition rights are as follows:

 

Category

  

Breakdown

of stock

acquisition

rights

   Class of shares
to be issued or

transferred upon
exercise of
stock acquisition
rights
     Number of shares to be issued or transferred upon
exercise of stock acquisition rights (Shares)
    Balance as of
September 30,
2020

(Millions of yen)
    Remarks  
   As of
April 1,
2020
    Increase
during the
period
    Decrease
during the
period
    As of
September 30,
2020
 

MHFG

   Stock acquisition rights (Treasury stock acquisition rights)      —         

—  

(—  

 

   

—  

(—  

     

   

—  

(—  

     

   

—  

(—  

     

   

—  

(—  

 

 
   Stock acquisition rights as stock option                  —             134        

Consolidated subsidiaries (Treasury stock acquisition rights)

                    —            

—  

(—  

 

 
                

 

 

   

Total

                 —            

134

(—  

 

 
    

 

 

   

 

- 25 -


3.

Cash dividends distributed by MHFG are as follows:

 

(1)

Cash dividends paid during the six months ended September 30, 2020

 

Resolution

 

Type

 

Cash Dividends

(Millions of yen)

 

Cash

Dividends

per Share

(Yen)

 

Record Date

 

Effective Date

May 15, 2020

 

The Board of Directors

  Common Stock     95,208   3.75   March 31, 2020   June 8, 2020

 

(Notes)     1.    Cash dividends based on the resolution of the Board of Directors held on May 15, 2020 include ¥73 million of cash dividends on treasury stock held by BBT trust account.
    2.        MHFG adopted the share consolidation of the shares of common stock on the basis of one post-consolidation share per ten pre-consolidation shares effective as of October 1, 2020. Cash Dividends per Share is recorded at the amount before the share consolidation.

 

(2)

Cash dividends with record dates falling in the six months ended September 30, 2020 and effective dates coming after the end of the period

 

Resolution

 

Type

 

Cash Dividends

(Millions of yen)

 

Resource of

Dividends

 

Cash

Dividends

per Share

(Yen)

 

Record Date

 

Effective Date

November 12, 2020

 

The Board of Directors

  Common Stock   95,209   Retained Earnings   3.75   September 30, 2020   December 7, 2020

 

(Notes)     1.    Cash dividends based on the resolution of the Board of Directors held on November 12, 2020 include ¥95 million of cash dividends on treasury stock held by BBT trust account.
    2.        MHFG adopted the share consolidation of the shares of common stock on the basis of one post-consolidation share per ten pre-consolidation shares effective as of October 1, 2020. Cash Dividends per Share is recorded at the amount before the share consolidation.

 

- 26 -


For the six months ended September 30, 2021

 

1.

Types and number of issued shares and of treasury stock are as follows:

 

     (Thousands of shares)  
     As of
April 1, 2021
     Increase during
the period
     Decrease during
the period
     As of
September 30, 2021
     Remarks  

Issued Shares

              

Common Stock

       2,539,249        —          —            2,539,249     
  

 

 

    

 

 

    

 

 

    

 

 

    

Total

       2,539,249        —          —            2,539,249     
  

 

 

    

 

 

    

 

 

    

 

 

    

Treasury Stock

              

Common Stock

     3,889          1,604           894        4,599        (Note
  

 

 

    

 

 

    

 

 

    

 

 

    

Total

     3,889        1,604        894        4,599     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

(Note)    Increases are due to acquisition of treasury stock by BBT trust account (1,062 thousand shares), and repurchase of shares constituting less than one unit and other factors (542 thousand shares). Decreases are due to distribution and sale of treasury stock through BBT trust account (536 thousand shares), exercise of stock acquisition rights (stock options) (23 thousand shares) and other factors. The number of shares as of September 30, 2021 includes the number of treasury stock held by BBT trust account (3,080 thousand shares).   

 

2.

Stock acquisition rights and treasury stock acquisition rights are as follows:

 

Category

  

Breakdown

of stock

acquisition

rights

   Class of shares
to be issued or
transferred upon
exercise of
stock acquisition
rights
     Number of shares to be issued or transferred upon
exercise of stock acquisition rights (Shares)
    Balance as of
September 30,
2021

(Millions of yen)
    Remarks  
   As of
April 1,
2021
    Increase
during the
period
    Decrease
during the
period
    As of
September 30,
2021
 

MHFG

   Stock acquisition rights (Treasury stock
acquisition rights)
     —         

—  

(—  

     

   

—  

(—  

     

   

—  

(—  

     

   

—      

(—  

 

   

—  

(—  

 

 
   Stock acquisition rights
as stock option
                 —               95        

Consolidated subsidiaries
(Treasury stock
acquisition rights)

                    —            

—  

(—  

 

 
                

 

 

   

Total

                    —            

95

(—  

 

 
    

 

 

   

 

- 27 -


3.

Cash dividends distributed by MHFG are as follows:

 

(1)

Cash dividends paid during the six months ended September 30, 2021

 

Resolution

 

Type

 

Cash Dividends

(Millions of yen)

 

Cash

Dividends

per Share

(Yen)

 

Record Date

 

Effective Date

May 14, 2021

 

The Board of Directors

  Common Stock     95,201   37.50   March 31, 2021   June 8, 2021

 

(Note)       Cash dividends based on the resolution of the Board of Directors held on May 15, 2021 include ¥95 million of cash
      dividends on treasury stock held by BBT trust account.

 

(2)

Cash dividends with record dates falling in the six months ended September 30, 2021 and effective dates coming after the end of the period

 

Resolution

 

Type

 

Cash Dividends

(Millions of yen)

 

Resource of
Dividends

 

Cash

Dividends

per Share

(Yen)

 

Record Date

 

Effective Date

November 12, 2021

 

The Board of Directors

  Common Stock   101,545   Retained Earnings   40.00   September 30, 2021   December 7, 2021

 

(Note)

      Cash dividends based on the resolution of the Board of Directors held on November 12, 2021 include ¥123 million of cash
      dividends on treasury stock held by BBT trust account.

Notes to Interim Consolidated Statement of Cash Flows

 

*1.

Cash and Cash Equivalents at the end of the period on the Interim Consolidated Statement of Cash Flows reconciles to Cash and Due from Banks on the Interim Consolidated Balance Sheet as follows:

 

     (Millions of yen)  
     For the six months ended
September 30, 2020
     For the six months ended
September 30, 2021
 

Cash and Due from Banks

     42,498,278        47,075,429  

Due from Banks excluding central banks

     (1,125,902      (1,280,173
  

 

 

    

 

 

 

Cash and Cash Equivalents

     41,372,376        45,795,255  
  

 

 

    

 

 

 

 

- 28 -


Lease Transactions

 

1.

Finance Leases (Lessees)

Finance lease transactions that do not transfer ownership:

 

  1)

Lease Assets:

 

  (a)

Tangible fixed assets: mainly equipment

 

  (b)

Intangible fixed assets: software

 

  2)

The method for computing the amount of depreciation is described in “4. Standards of Accounting Method (5) Depreciation of Fixed Assets.”

 

2.

Operating Leases

The future lease payments subsequent to the end of the fiscal year for non-cancelable operating lease transactions are summarized as follows:

 

(1)

Lessees:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Due in One Year or Less

     52,280        48,596  

Due after One Year

     275,241        266,258  
  

 

 

    

 

 

 

Total

     327,521        314,854  
  

 

 

    

 

 

 

 

(2)

Lessors:

 

     (Millions of yen)  
     As of March 31, 2021      As of September 30, 2021  

Due in One Year or Less

     7,191        7,479  

Due after One Year

     1,591        3,369  
  

 

 

    

 

 

 

Total

         8,782          10,848  
  

 

 

    

 

 

 

 

- 29 -


Financial Instruments

 

1.

Matters relating to fair value of financial instruments and others

The following are the interim consolidated balance sheet amounts (the consolidated balance sheet amounts), fair values and differences between them. Stocks and others without a quoted market price and Investments in Partnerships and others are excluded from the table below (see (Note 1)). In addition, notes concerning Cash and Due from Banks, Call Loans and Bills Purchased, Receivables under Resale Agreements, Guarantee Deposits Paid under Securities Borrowing Transactions, Call Money and Bills Sold, Payables under Repurchase Agreements, Guarantee Deposits Received under Securities Lending Transactions, and Due to Trust Accounts are omitted since these instruments are mainly settled in the short term and the fair values approximate the book values.

As of March 31, 2021

 

     (Millions of yen)  
      Consolidated Balance 
Sheet Amount
    Fair Value      Difference  

(1)   Other Debt Purchased

     3,208,004       3,208,136        132  

(2)   Trading Assets

       

     Trading Securities

     6,421,348       6,421,348        —    

(3)   Money Held in Trust

     579,764       579,764        —    

(4)   Securities

       

     Bonds Held to Maturity

     885,529       903,599        18,069  

     Other Securities

     41,681,945       41,681,945        —    

(5)   Loans and Bills Discounted

     83,704,675       

     Reserves for Possible Losses on Loans (*1)

     (513,832     
  

 

 

   

 

 

    

 

 

 
     83,190,843       84,213,843        1,023,000  
  

 

 

   

 

 

    

 

 

 

Total Assets

     135,967,435       137,008,638        1,041,203  
  

 

 

   

 

 

    

 

 

 

(1)   Deposits

     133,312,406       133,303,018        (9,387

(2)   Negotiable Certificates of Deposit

     17,192,572       17,191,241        (1,331

(3)   Trading Liabilities

       

     Securities Sold, Not yet Purchased

     2,402,420       2,402,420        —    

(4)   Borrowed Money

     7,441,822       7,435,289        (6,533

(5)   Bonds and Notes

     10,321,672       10,529,372        207,700  
  

 

 

   

 

 

    

 

 

 

Total Liabilities

     170,670,893       170,861,341        190,447  
  

 

 

   

 

 

    

 

 

 

 

- 30 -


     (Millions of yen)  
      Consolidated Balance 
Sheet Amount
    Fair Value      Difference  

Derivative Transactions (*2)

       

Derivative Transactions not Qualifying for Hedge Accounting

     272,522                            

Derivative Transactions Qualifying for Hedge Accounting (*3)

     124,703       
  

 

 

   

 

 

    

 

 

 

Total Derivative Transactions

             397,225               397,225        —     
  

 

 

   

 

 

    

 

 

 

 

(*1)

General and specific reserves for possible losses on loans relevant to Loans and Bills Discounted are excluded.

Items other than Loans and Bills Discounted are recorded at the consolidated balance sheet amounts due to immateriality of their reserves.

(*2)

Derivative Transactions recorded in Trading Assets, Trading Liabilities, Derivatives other than for Trading Assets, Derivatives other than for Trading Liabilities, and others are presented as a lump sum.

Net claims and debts that arose from derivative transactions are presented on a net basis, and the item that is net debts in total is presented in brackets.

(*3)

The deferred method is mainly applied. “Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR” (ASBJ Practical Solutions No.40, September 29, 2020) is applied to these hedge transactions.

 

- 31 -


As of September 30, 2021

 

     (Millions of yen)  
     Interim Consolidated
Balance Sheet Amount
    Fair Value      Difference  

(1)   Other Debt Purchased

     3,137,520       3,137,661        140  

(2)   Trading Assets

       

     Trading Securities

     8,028,212       8,028,212        —    

(3)   Money Held in Trust

     635,086       635,086        —    

(4)   Securities

       

     Bonds Held to Maturity

     1,394,142       1,403,581        9,439  

     Other Securities

     41,101,360       41,101,360        —    

(5)   Loans and Bills Discounted

     82,198,528       

     Reserves for Possible Losses on Loans (*1)

     (529,605     
  

 

 

   

 

 

    

 

 

 
     81,668,922       82,829,668        1,160,745  
  

 

 

   

 

 

    

 

 

 

Total Assets

     135,965,246       137,135,571        1,170,325  
  

 

 

   

 

 

    

 

 

 

(1)   Deposits

     129,291,662       129,279,700        (11,962

(2)   Negotiable Certificates of Deposit

     19,215,068       19,213,867        (1,201

(3)   Trading Liabilities

       

     Securities Sold, Not yet Purchased

     2,477,688       2,477,688        —    

(4)   Borrowed Money

     7,495,869       7,490,947        (4,922

(5)   Bonds and Notes

     10,513,503       10,725,226        211,723  
  

 

 

   

 

 

    

 

 

 

Total Liabilities

     168,993,791       169,187,428        193,636  
  

 

 

   

 

 

    

 

 

 

Derivative Transactions (*2)

       

Derivative Transactions not Qualifying for Hedge Accounting

     390,989       

Derivative Transactions Qualifying for Hedge Accounting (*3)

     102,903       
  

 

 

   

 

 

    

 

 

 

Total Derivative Transactions

            493,892               493,892                  —     
  

 

 

   

 

 

    

 

 

 

 

(*1)

General and specific reserves for possible losses on loans relevant to Loans and Bills Discounted are excluded. Items other than Loans and Bills Discounted are recorded at the interim consolidated balance sheet amounts due to immateriality of their reserves.

(*2)

Derivative Transactions recorded in Trading Assets, Trading Liabilities, Derivatives other than for Trading Assets, Derivatives other than for Trading Liabilities, and others are presented as a lump sum.

Net claims and debts that arose from derivative transactions are presented on a net basis, and the item that is net debts in total is presented in brackets.

(*3)

The deferred method is mainly applied. “Treatment of Hedge Accounting for Financial Instruments that Reference LIBOR” (ASBJ Practical Solutions No.40, September 29, 2020) is applied to these hedge transactions.

 

- 32 -


(Note 1)

The following are the interim consolidated balance sheet amounts (the consolidated balance sheet amounts) of Stocks and others without a quoted market price, and Investments in Partnerships and others. These amounts are not included in Money Held in Trust and Other Securities in fair value information of financial instruments.

 

(Millions of yen)

 

Category

   As of March 31, 2021      As of September 30, 2021  

Stocks and others without a quoted market price (*1)

     479,094        496,342  

Investments in Partnerships and others (*2)

     304,404        365,706  

 

  *1

Stocks and others without a quoted market price include unlisted stocks and others and in accordance with Article 5 of “Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No.19, July 4, 2019), these items are not subject to disclosure of the fair value.

  *2

Investments in Partnerships and others are mainly silent partnership, investment partnership, and money held in trust with the investment in a silent partnership as the component of the trust property. In accordance with Article 27 of “Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.31, July 4, 2019), these items are not subject to disclosure of the fair value.

    3

During the fiscal year ended March 31, 2021, the amount of impairment (devaluation) was ¥4,490 million on a consolidated basis. During the six months ended September 30, 2021, the amount of impairment (devaluation) was ¥1,402 million on a consolidated basis.

 

2.

Matters relating to breakdown of fair value of financial instruments by level

Fair values of financial instruments are categorized into three levels as below on the basis of the observability and the materiality of the valuation inputs used in fair value measurements.

Fair values of Level 1: Fair values measured by quoted prices of the assets or liabilities being measured which are given in active markets among observable valuation inputs

Fair values of Level 2: Fair values measured by inputs other than inputs included within Level 1 among observable valuation inputs

Fair values of Level 3: Fair values measured by unobservable valuation inputs

When several inputs that have significant impact on fair value measurement are used and those inputs are categorized into different levels, the fair value is categorized into the lowest priority level for fair value measurement among the levels in which each of the inputs belongs.

 

- 33 -


(1)

Financial instruments recorded at fair value in the interim consolidated balance sheet (the consolidated balance sheet)

As of March 31, 2021

 

     (Millions of yen)  

Category

   Fair Value  
   Level 1      Level 2      Level 3      Total  

Other Debt Purchased

     —          46,102        636,815        682,918  

Trading Assets

           

Trading Securities

           

Japanese Government Bonds

     1,797,490        11,106        —          1,808,597  

Japanese Local Government Bonds

     —          108,835        —          108,835  

Japanese Corporate Bonds

     —          1,518,933        1,897        1,520,830  

Stocks

     98,183        0        223        98,407  

Other

     770,911        1,879,783        130,532        2,781,227  

Money Held in Trust

     —          551,395        3        551,399  

Securities

           

Other Securities

           

Stocks

     2,857,921        —          8,063        2,865,985  

Japanese Government Bonds

     20,597,775        322,807        —          20,920,582  

Japanese Local Government Bonds

     —          463,559        —          463,559  

Japanese Corporate Bonds

     —          653,764        2,107,142        2,760,906  

Foreign Bonds

     5,157,651        6,502,601        773,659        12,433,912  

Other

     40,067        —          13,920        53,988  

Derivative Transactions

           

Interest Rate and Bond-Related Transactions

     57,102        4,601,052        28,902        4,687,057  

Currency-Related Transactions

     —          3,305,074        25,583        3,330,657  

Stocks-Related Transactions

     168,398        338,917        48,563        555,879  

Commodity-Related Transactions

     3,538        8,339        17,472        29,350  

Credit Derivative Transactions

     —          91,452        3,002        94,454  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

     31,549,042          20,403,726          3,795,782        55,748,550  
  

 

 

    

 

 

    

 

 

    

 

 

 

Trading Liabilities

           

Securities Sold, Not yet Purchased

     2,082,161        264,577        132        2,346,872  

Derivative Transactions

           

Interest Rate and Bond-Related Transactions

     57,232        4,412,401        3,960        4,473,594  

Currency-Related Transactions

     —          3,323,191        725        3,323,916  

Stocks-Related Transactions

     200,835        116,626        45,119        362,581  

Commodity-Related Transactions

     —          9,443        16,631        26,075  

Credit Derivative Transactions

     —          112,257        1,750        114,007  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities

     2,340,229        8,238,497        68,319          10,647,046  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(*)

Investment trust and others applying the transitional measures set forth in Article 26 of “Implementation Guidance on Accouting Standard for Fair Value Measurements” (ASBJ Guidance No. 31 July 4, 2019) are not included in above table. The financial assets and liabilities of the relevant investment trust and others in the consolidated balance sheet is ¥2,307,126 million and ¥55,548 million.

 

- 34 -


As of September 30, 2021

 

     (Millions of yen)  

Category

   Fair Value  
   Level 1      Level 2      Level 3      Total  

Other Debt Purchased

     —          42,927        556,800        599,727  

Trading Assets

           

Trading Securities

           

Japanese Government Bonds

     2,499,462        8,736        —          2,508,198  

Japanese Local Government Bonds

     —          63,252        —          63,252  

Japanese Corporate Bonds

     —          1,384,621        0        1,384,621  

Stocks

     467,036        —          200        467,236  

Other

     1,034,328        2,237,159        130,926        3,402,413  

Money Held in Trust

     —          591,634        3        591,638  

Securities

           

Other Securities

           

Stocks

     2,923,256        —          9,870        2,933,126  

Japanese Government Bonds

     18,806,856        196,186        —          19,003,042  

Japanese Local Government Bonds

     —          494,943        —          494,943  

Japanese Corporate Bonds

     —          968,884        1,967,085        2,935,970  

Foreign Bonds

     6,496,970        6,428,679        563,733        13,489,382  

Other

     42,620        —          13,787        56,408  

Derivative Transactions

           

Interest Rate and Bond-Related Transactions

     31,684        3,391,044        27,748        3,450,476  

Currency-Related Transactions

     —          2,465,259        23,276        2,488,536  

Stocks-Related Transactions

     183,129        282,484        57,116        522,730  

Commodity-Related Transactions

     8,503        9,158        32,934        50,596  

Credit Derivative Transactions

     —          113,153        3,850        117,003  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

     32,493,848          18,678,124          3,387,335          54,559,308  
  

 

 

    

 

 

    

 

 

    

 

 

 

Trading Liabilities

           

Securities Sold, Not yet Purchased

     2,123,521        304,958        201        2,428,681  

Derivative Transactions

           

Interest Rate and Bond-Related Transactions

     25,958        3,208,897        5,866        3,240,722  

Currency-Related Transactions

     —          2,381,684        1,294        2,382,978  

Stocks-Related Transactions

     165,963        98,639        63,451        328,055  

Commodity-Related Transactions

     —          15,179        32,101        47,281  

Credit Derivative Transactions

     —          134,242        2,170        136,413  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities

     2,315,444        6,143,602        105,086        8,564,133  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(*)

Investment trust and others applying the transitional measures set forth in Article 26 of “Implementation Guidance on Accounting Standard for Fair Value Measurements” (ASBJ Guidance No. 31 July 4, 2019) are not included in above table. The financial assets and liabilities of the relevant investment trust and others in the interim consolidated balance sheet is ¥2,410,996 million and ¥49,006 million.

 

- 35 -


(2)

Financial instruments other than financial instruments recorded at fair value in the interim consolidated balance sheet (the consolidated balance sheet)

As of March 31, 2021

 

     (Millions of yen)  

Category

   Fair Value  
   Level 1      Level 2      Level 3      Total  

Other Debt Purchased

     —          11,397        2,513,688        2,525,086  

Money Held in Trust

     —          —          7,700        7,700  

Securities

           

Bonds Held to Maturity

           

Japanese Government Bonds

          489,514        —          —          489,514  

Foreign Bonds

     —          414,085        —          414,085  

Loans and Bills Discounted

     —          —          84,213,843        84,213,843  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

     489,514        425,482        86,735,232        87,650,229  
  

 

 

    

 

 

    

 

 

    

 

 

 

Deposits

     —          133,303,018        —          133,303,018  

Negotiable Certificates of Deposit

     —          17,191,241        —          17,191,241  

Borrowed Money

     —          7,349,171        86,117        7,435,289  

Bonds and Notes

     —          9,712,019        817,353        10,529,372  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities

     —          167,555,450        903,470        168,458,921  
  

 

 

    

 

 

    

 

 

    

 

 

 

As of September 30, 2021

 

     (Millions of yen)  

Category

   Fair Value  
   Level 1      Level 2      Level 3      Total  

Other Debt Purchased

     —          10,743        2,527,189        2,537,933  

Money Held in Trust

     —          —          23,426        23,426  

Securities

           

Bonds Held to Maturity

           

Japanese Government Bonds

          487,406        —          —          487,406  

Foreign Bonds

     —          916,175        —          916,175  

Loans and Bills Discounted

     —          —          82,829,668        82,829,668  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Assets

     487,406        926,919        85,380,284        86,794,610  
  

 

 

    

 

 

    

 

 

    

 

 

 

Deposits

     —          129,279,700        —          129,279,700  

Negotiable Certificates of Deposit

     —          19,213,867        —          19,213,867  

Borrowed Money

     —          7,404,184        86,762        7,490,947  

Bonds and Notes

     —          9,749,115        976,110        10,725,226  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total Liabilities

     —          165,646,868        1,062,872        166,709,740  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

- 36 -


(Note 1)

Explanation of valuation techniques and valuation inputs used in fair value measurements

Assets

Other Debt Purchased

Fair values of securitized products of other debt purchased are based on the values deemed as market prices obtained by the reasonable estimate such as those obtained from brokers and financial information vendors and are categorized as Level 3 when significant unobservable valuation inputs are used for the obtained price and as Level 2 when other inputs are used.

With respect to other debt purchased other than those described above, when the present values of the expected future cash flows are considered to be fair values, those other debt purchased are mainly categorized as Level 3 since the discount rate and other significant valuation inputs are unobservable. When those are short term in nature and the book values are considered to be fair values, those other debt purchased are categorized as Level 3.

Trading Assets

Fair values of trading assets for which unadjusted quoted market prices in active markets are available are categorized as Level 1, which includes mainly government bonds.

In the case the market is inactive even if the quoted market price is available, those trading assets are categorized as Level 2, which includes mainly local government bonds and corporate bonds.

When fair vales are measured at the present value of the expected future cash flows and others using significant unobservable inputs, those trading assets are categorized as Level 3, which includes mainly bonds with warrants and trust beneficiary rights.

Money Held in Trust

With respect to securities managed as trust assets in a directed money trust for separate investment with the management of securities as its primary purpose, fair values of stocks are measured at the price in stock exchanges and bonds are measured at market price or valuation price obtained from brokers or financial information vendors and are categorized as Level 2 or Level 3 based on the level of components.

The notes to Money Held in Trust based on holding purpose are stated in “Money Held in Trust.”

Securities

Fair values of securities for which unadjusted quoted market prices in active markets are available are categorized as Level 1 which includes mainly stocks and government bonds. In the case the market is inactive even if the quoted market price is available, those securities are categorized as Level 2, which includes mainly local government bonds and corporate bonds.

Fair values of investment trusts are measured at the disclosed net asset value and others. Those are not categorized into Levels by applying the transitional measures set forth in Article 26 of “Implementation Guidance on Accounting Standard for Fair Value Measurements.”

Fair values of private placement bonds are measured by discounting the total amount of principal and interest and others at interest rates based on the discount rate reflecting expected loss and various risk factors by categories based on the internal ratings and terms and are mainly categorized as Level 3 since the discount rate is unobservable.

Fair values of securitized products are based on valuations obtained from brokers and others, and reasonably measured prices based on the reasonable estimates of our management and are categorized as Level 3 when significant unobservable valuation inputs are used and as Level 2 when other inputs are used. In deriving reasonably measured prices based on the reasonable estimates of our management mentioned above, we used the discounted cash flow method. The price decision variables include default rates, recovery rates, prepayment rates, and discount rates.

The notes to Securities based on holding purpose are stated in “Securities.”

Loans and Bills Discounted

Fair values of loans and bills discounted are measured by discounting the total amount of principal and interest and others at interest rates based on the discount rate reflecting expected loss and various risk factors by categories according to the types, internal ratings and terms of the loans and bills discounted and are categorized as Level 3 since the discount rate is unobservable.

In addition, fair values of claims against bankrupt obligors, substantially bankrupt obligors, and intensive control obligors whose bad debts are measured at the present value of the expected future cash flows or the estimated amounts calculated based on the recoverability from collateral and guarantees approximate the amount of claims and others minus the amount of reserves for possible losses on loans in the interim consolidated balance sheet (the consolidated balance sheet) as of the interim consolidated balance sheet date (the consolidated balance sheet date) and those amount are considered to be fair values which are categorized as Level 3.

 

- 37 -


Among the loans and bills discounted, for those without a fixed maturity due to loan characteristics such as limiting loans to within the value of pledged assets, book values are considered to be fair values since fair values are expected to approximate book values based on the estimated loan periods, interest rates and other conditions. Fair values of those loans and bills discounted are categorized as Level 3.

Liabilities

Deposits and Negotiable Certificates of Deposit

For demand deposits, the payment amounts required on the interim consolidated balance sheet date (the consolidated balance sheet date) (i.e., book values) are considered to be fair values.

In addition, fair values of time deposits and negotiable certificates of deposits are calculated by classifying them based on their terms and by discounting the future cash flows. The discount rates used in such calculations are the market interest rates. Since fair values of those whose deposit terms are short (i.e., within six months) approximate book values, the book values are considered to be fair values and those fair values are categorized as Level 2.

Trading Liabilities

Fair values of trading liabilities for which unadjusted quoted market prices in active markets are available are categorized as Level 1, which includes mainly listed stocks and government bonds.

In the case the market is inactive even if the quoted market price is available, those trading liabilities are categorized as Level 2, which includes mainly corporate bonds.

When significant unobservable inputs are used, those trading liabilities are categorized as Level 3.

Borrowed Money

Fair values of borrowed money are measured mainly by discounting the total amount of the principal and interest of such borrowed money classified by period lengths at the interest rates considered to be applicable to similar loans and are categorized as Level 3 when the impact from unobservable valuation inputs is significant and as Level 2 when it is not significant.

Bonds and Notes

With respect to bonds and notes issued by MHFG and its consolidated subsidiaries, fair values of bonds and notes with market prices are measured at the market prices and fair values of those without market prices are calculated by discounting the total amount of the principal and interest at the interest rates considered to be applicable to similar bonds and notes. Bonds and notes with market prices are categorized as Level 2. Those without market prices are categorized as Level 3 when the impact from unobservable valuation inputs is significant and as Level 2 when it is not significant.

Derivative Transactions

Derivative transactions that can be measured at unadjusted quoted prices in active markets are categorized as Level 1, which includes such transactions as bonds futures and interest rate futures.

However, since most derivative transactions are over-the-counter transactions and there are no quoted market prices, market values are measured using valuation techniques such as the discounted cash flow method and the Black-Scholes model, depending on the type of transaction and the maturity period. The main inputs which are used in those valuation techniques are interest rate, currency rate, volatility and others. In addition, price adjustments based on counterparty’s credit risk and consolidated subsidiary’s own credit risk and price adjustments for unsecured funding are made. When unobservable inputs are not used or impact of unobservable inputs are not material, transactions are categorized as Level 2, which includes such transactions as plain vanilla interest rate swaps and foreign exchange forwards. When significant unobservable inputs are used, transactions are categorized as Level 3, which includes transactions such as commodity related transactions.

 

- 38 -


(Note 2)

Information relating to fair values of Level 3 among the financial instruments recorded at fair value in the interim consolidated balance sheet (the consolidated balance sheet)

 

(1)

Quantitative information of significant unobservable valuation inputs

As of March 31, 2021

 

Category

  

Principal valuation
technique

  

Significant unobservable
valuation input

  

Range of valuation
input

    

Weighted average

 

Other Debt Purchased

           

Securitized products

   Discounted cash flow method    Prepayment rate      1.7% — 16.5%        6.7%  
   Default rate      0.0% —1.0%        0.0%  
   Discount rate      0.2% — 1.7%        0.5%  

Trading Assets

           

Trading Securities

   Discounted cash flow method    Discount rate      0.4% — 4.3%        1.0%  

Securities

           

Japanese Corporate Bonds

           

Private placement bonds

   Discounted cash flow method    Discount rate      0.0% — 6.6%        0.7%  

Foreign Bonds

           

Securitized products

   Discounted cash flow method    Prepayment rate      10.1% — 18.2%        18.1%  
   Default rate      1.0% — 24.2%        1.7%  
   Recovery rate      10.0% — 67.7%        65.6%  
   Discount rate      0.4% — 1.4%        1.1%  

Other

   Discounted cash flow method    Discount rate      0.0% — 5.0%        0.4%  

Trading Liabilities

           

Securities Sold, Not yet Purchased

   Discounted cash flow method    Discount rate      1.4%        1.4%  

Derivative Transactions

           

Interest Rate and Bond-Related Transactions

   Option valuation model    IR — IR correlation      35.0% — 100.0%        —    

Currency-Related Transactions

   Option valuation model    FX — IR correlation      22.9% — 49.6%       
—  
 
   FX — FX correlation      42.5% — 64.7%        —    

Stocks-Related Transactions

   Option valuation model    Equity — IR correlation      25.0%        —    
   Equity — FX correlation      (32.5)% — 50.0%        —    
   Equity correlation      0.0% — 100.0%        —    
   Equity volatility      8.4% — 70.7%        —    

Commodity-Related Transactions

   Option valuation model    Commodity volatility      0.0% — 63.1%        —    

Credit Derivative Transactions

   Discounted cash flow method    Default rate      0.0% — 4.8%        —    
   Credit correlation      17.2% — 100.0%        —    

 

- 39 -


As of September 30, 2021

 

Category

  

Principal valuation
technique

  

Significant unobservable
valuation input

  

Range of valuation
input

    

Weighted average

 

Other Debt Purchased

           

Securitized products

   Discounted cash flow method    Prepayment rate      1.0% — 16.9%        6.3%  
   Default rate      0.0% — 0.9%        0.0%  
   Discount rate      0.2% — 1.7%        0.5%  

Trading Assets

           

Trading Securities

   Discounted cash flow method    Discount rate      0.6% — 1.9%        0.7%  

Securities

           

Japanese Corporate Bonds

           

Private placement bonds

   Discounted cash flow method    Discount rate      0.0% — 7.2%        0.7%  

Foreign Bonds

           

Securitized products

   Discounted cash flow method    Prepayment rate      22.1% — 24.0%        23.8%  
   Default rate      0.4% — 30.4%        1.6%  
   Recovery rate      10.0% — 67.7%        64.5%  
   Discount rate      0.2% — 1.4%        1.0%  

Other

   Discounted cash flow method    Discount rate      0.0% — 5.0%        0.6%  

Derivative Transactions

           

Interest Rate and Bond-Related Transactions

   Option valuation model    IR — IR correlation      23.1% — 100.0%        —    

Currency-Related Transactions

   Option valuation model    FX — IR correlation      23.9% — 51.3%        —    
   FX — FX correlation      41.3% — 64.8%        —    

Stocks-Related Transactions

   Option valuation model    Equity — IR correlation      25.0%        —    
   Equity — FX correlation      (17.8)% — 93.2%        —    
   Equity correlation      7.1% — 100.0%        —    
   Equity volatility      7.1% — 100.7%        —    

Commodity-Related Transactions

   Option valuation model    Commodity volatility      0.0% — 41.0%        —    

Credit Derivative Transactions

   Discounted cash flow method    Default rate      0.0% — 5.9%        —    
   Credit correlation      16.8% — 100.0%        —    

 

- 40 -


(2)

Adjustment sheet from beginning balance to ending balance as of interim period (ending balance as of period) and unrealized gains (losses) recognized as gains (losses) for the period

As of March 31, 2021

 

    (Millions of yen)  
    Beginning
balance
   

 

Gains(losses) for the period/ other
comprehensive income

    Net amount
of purchase,
sale, issue,
and
settlement
    Transfer to
fair values

of Level 3
(*3)
    Transfer from
fair values of
Level 3

(*4)
    Ending
balance as of
period
    Unrealized
gains (losses)
on financial
assets and
liabilities

held as of
the consolidated
balance sheet

date among
the amount
recorded to

gains (losses)
for the period
(*1)
 
    Recorded to
gains(losses) for
the period (*1)
    Recorded to other
comprehensive
income

(*2)
 

Other Debt Purchased

    151,219       (3     (125     485,724       —         —         636,815       —    

Trading Assets

               

Trading Securities

               

Japanese Corporate Bonds

    797       (6     —         1,106       —         —         1,897       (2

Stocks

    206       —         —         17       —         —         223       —    

Other

    156,666       6,344       —         (31,596     116       (999     130,532       4,968  

Money Held in Trust

    3       0       —         0       —         —         3       —    

Securities

               

Other Securities

               

Stocks

    6,317       —         296       1,450       —         —         8,063       —    

Japanese Corporate Bonds

    2,201,133       533       (633     (70,069     —         (23,821     2,107,142       —    

Foreign Bonds

    847,601       39,316       40,442       (166,932     13,230       —         773,659       —    

Other

    18,663       548       (897     (4,393     —         —         13,920       —    

Trading Liabilities

               

Securities Sold, Not yet Purchased

    232       0       —         (100     —         —         132       (0

Derivative Transactions

               

Interest Rate and Bond-Related Transactions

    7,696       4,387       —         12,858       —         —         24,942       13,343  

Currency-Related Transactions

    16,277       10,141       —         (1,561     —         —         24,857       10,526  

Stocks-Related Transactions

    69,571       (67,728     —         1,601       —         —         3,444       (33,744

Commodity-Related Transactions

    1,240       525       —         (924     —         —         841       49  

Credit Derivative Transactions

    3,516       (2,522     —         (246     1,252       (748     1,251       (3,471

 

- 41 -


(*1)

Those amounts are mainly included in Trading Income, Trading Expenses, Other Operating Income and Other Operating Expenses in the consolidated statement of income.

(*2)

Those amounts are included in Net Unrealized Gains (Losses) on Other Securities of Other Comprehensive Income in the consolidated statement of comprehensive income.

(*3)

Those are the transfers from Level 2 to Level 3, due to changes in observability of valuation inputs which are used in fair value measurements based on market liquidity. The transfer was made on the beginning of the accounting period.

(*4)

Those are the transfers from Level 3 to Level 2, mainly due to increase of the observability of the discount rate which is used in fair value measurements for private placement bonds. The transfer was made on the beginning of the accounting period.

 

- 42 -


As of September 30, 2021

 

    (Millions of yen)  
    Beginning
balance
   

 

Gains(losses) for the period/other
comprehensive income

    Net amount
of purchase,
sale, issue,
and
settlement
    Transfer to
fair values

of Level 3
    Transfer from
fair values of
Level 3
    Ending
balance as of
interim period
    Unrealized
gains (losses)
on financial
assets and
liabilities

held as of
the interim
consolidated
balance sheet

date among
the amount
recorded to

gains (losses)
for the period
(*1)
 
    Recorded to
gains(losses) for
the period (*1)
    Recorded to other
comprehensive
income

(*2)
 

Other Debt Purchased

    636,815       (1     (15     (79,997     —         —         556,800       —    

Trading Assets

               

Trading Securities

               

Japanese Corporate Bonds

    1,897       (0     —         (1,897     —         —         0       —    

Stocks

    223       —         —         (23     —         —         200       (354

Other

    130,532       967       —         (24     —         (547     130,926       (200

Money Held in Trust

    3       0       —         —         —         —         3       —    

Securities

               

Other Securities

               

Stocks

    8,063       —         6       1,800       —         —         9,870       —    

Japanese Corporate Bonds

    2,107,142       (217     2,622       (142,460     —         —         1,967,085       —    

Foreign Bonds

    773,659       3,704       (578     (213,052     —         —         563,733       —    

Other

    13,920       (768     953       (317     —         —         13,787       —    

Trading Liabilities

               

Securities Sold, Not yet Purchased

    132       1       —         200       —         (132     201       (2

Derivative Transactions

               

Interest Rate and Bond-Related Transactions

    24,942       (11,970     —         8,910       —         —         21,881       (7,101

Currency-Related Transactions

    24,857       (3,159     —         284       —         —         21,982       (3,081

Stocks-Related Transactions

    3,444       (13,672     —         3,892       —         —         (6,335     3,240  

Commodity-Related Transactions

    841       284       —         (293     —         —         833       123  

Credit Derivative Transactions

    1,251       (789     —         1,719       (597     96       1,680       1,055  

 

- 43 -


(*1)

Those amounts are mainly included in Trading Income, Trading Expenses, Other Operating Income and Other Operating Expenses in the interim consolidated statement of income.

(*2)

Those amounts are included in Net Unrealized Gains (Losses) on Other Securities of Other Comprehensive Income in the interim consolidated statement of comprehensive income.

 

- 44 -


(3)

Explanation of the process of fair value measurement

In MHFG, middle-offices and back-offices have established policies and procedures related to the measurement of fair values and procedures related to usage of the valuation model. For the fair values and the level categories, the validity of the valuation techniques and valuation inputs used in fair value measurement are verified.

In fair value measurement, valuation models in which the nature, characteristics and risks of individual assets are most appropriately reflected are used. In addition, when quoted prices obtained from third parties are used, the validity of the prices is verified by appropriate methods such as confirmation of valuation techniques and used valuation inputs and comparison with the fair values of similar financial instruments.

 

(4)

Explanation of the impact on fair values in the case where significant unobservable inputs are varied

Prepayment rate

The prepayment rate is the estimated rate at which voluntary unscheduled repayments of the principal of the underlying assets are expected to occur. The movement of the prepayment rate is generally negatively correlated with borrower delinquency. A significant change in the prepayment rate would significantly impact the valuation of the fair values of financial instruments either positively or negatively, depending on the structure of financial instruments.

Default rate

The default rate is an estimate of the likelihood of not collecting contractual payments. A significant increase (decrease) in the default rate would generally be accompanied by a decrease (increase) in the recovery rate and an increase (decrease) in the discount rate. It would also generally significantly impact the valuation of the fair values of financial instruments negatively (positively).

Recovery rate

The recovery rate is an estimate of the percentage of contractual payments that would be collected in the event of a default. A significant increase (decrease) in recovery rate would generally be accompanied by a decrease (increase) in the default rate. It would also generally significantly impact the valuation of the fair values of financial instruments positively (negatively).

Discount rate

The discount rate is an adjustment rate to a benchmark market interest rate such as TIBOR or swap rates. It primarily consists of a risk premium component which is the amount of compensation that market participants require due to the uncertainty inherent in the financial instruments’ cash flows resulting from credit risk. A significant increase (decrease) in discount rate would generally significantly impact the valuation of the fair values of financial instruments negatively (positively).

Correlation

Correlation is the likelihood of the movement of one input relative to another based on an established relationship. A significant change in correlation would significantly impact the valuation of derivatives either positively or negatively, depending on the nature of the underlying assets.

Volatility

Volatility is a measure of the expected change in variables over a fixed period of time. Some financial instruments benefit from an increase in volatility and others benefit from a decrease in volatility. Generally, a significant increase (decrease) in volatility would result in a significant increase (decrease) in option values and, for a long position in an option, it would result in a significant increase (decrease) in the fair values of financial instruments.

 

- 45 -


Securities

In addition to “Securities” on the interim consolidated balance sheet (the consolidated balance sheet), Negotiable Certificates of Deposit in “Cash and Due from Banks,” certain items in “Other Debt Purchased” and certain items in “Other Assets” are also included.

 

1.

Bonds Held to Maturity

As of March 31, 2021

 

(Millions of yen)

    

Type

  

Consolidated Balance

Sheet Amount

  

Fair Value

  

Difference

Bonds Whose Fair Values Exceed the Consolidated Balance Sheet Amount

   Japanese Government Bonds    479,958    489,514    9,555 
  

Foreign Bonds

   274,173    285,842    11,669 
     

 

  

 

  

 

  

Sub-total

   754,131    775,356    21,225 
     

 

  

 

  

 

Bonds Whose Fair Values Do Not Exceed the Consolidated Balance Sheet Amount

   Japanese Government Bonds    —      —      —   
  

Foreign Bonds

   131,397    128,242    (3,155)
     

 

  

 

  

 

  

Sub-total

   131,397    128,242    (3,155)
     

 

  

 

  

 

Total

   885,529    903,599    18,069 
  

 

  

 

  

 

 

  As of September 30, 2021

 

           

(Millions of yen)

    

Type

  

Interim Consolidated

Balance Sheet Amount

  

Fair Value

  

Difference

Bonds Whose Fair Values Exceed the Interim Consolidated Balance Sheet Amount

   Japanese Government Bonds    479,969    487,406    7,436 
   Foreign Bonds    249,613    258,047    8,434 
     

 

  

 

  

 

  

Sub-total

   729,582    745,453    15,871 
     

 

  

 

  

 

Bonds Whose Fair Values Do Not Exceed the Interim Consolidated Balance Sheet Amount

   Japanese Government Bonds    —      —      —   
   Foreign Bonds    664,560    658,128    (6,431)
     

 

  

 

  

 

  

Sub-total

   664,560    658,128    (6,431)
     

 

  

 

  

 

Total

   1,394,142    1,403,581    9,439 
  

 

  

 

  

 

 

- 46 -


2.

Other Securities

As of March 31, 2021

 

(Millions of yen)

 
    

Type

   Consolidated Balance
      Sheet Amount      
     Acquisition Cost      Difference  

Other Securities Whose Consolidated Balance Sheet Amount Exceeds Acquisition Cost

   Stocks      2,726,040        981,426              1,744,614  
  

Bonds

     14,440,198        14,415,433        24,765  
  

Japanese Government Bonds

     12,716,957        12,713,374        3,583  
  

Japanese Local Government Bonds

     196,757        196,213        544  
  

Japanese Corporate Bonds

     1,526,483        1,505,845        20,637  
  

Other

           7,865,959              7,645,538        220,421  
  

Foreign Bonds

     6,246,882        6,180,203        66,678  
  

Other Debt Purchased

     44,418        43,662        755  
  

Other

     1,574,659        1,421,672        152,986  
     

 

 

    

 

 

    

 

 

 
  

Sub-total

     25,032,198        23,042,398        1,989,800  
     

 

 

    

 

 

    

 

 

 

Other Securities Whose Consolidated Balance Sheet Amount Does Not Exceed Acquisition Cost

   Stocks      139,945        186,294        (46,348
  

Bonds

     9,704,849        9,774,593        (69,743
  

Japanese Government Bonds

     8,203,625        8,238,926        (35,301
  

Japanese Local Government Bonds

     266,801        267,459        (657
  

Japanese Corporate Bonds

     1,234,423        1,268,208        (33,785
  

Other

     7,657,854        7,928,309        (270,454
  

Foreign Bonds

     6,187,029        6,286,717        (99,687
  

Other Debt Purchased

     638,500        638,687        (187
  

Other

     832,325        1,002,904        (170,579
     

 

 

    

 

 

    

 

 

 
  

Sub-total

     17,502,649        17,889,197        (386,547
     

 

 

    

 

 

    

 

 

 

Total

     42,534,848        40,931,595        1,603,253  
     

 

 

    

 

 

    

 

 

 

 

(Note)

Unrealized Gains (Losses) includes ¥32,481 million which was recognized in the statement of income by applying the fair-value hedge method.

 

- 47 -


As of September 30, 2021

 

(Millions of yen)

 
   

Type

   Interim Consolidated
Balance Sheet Amount
     Acquisition Cost      Difference  

Other Securities Whose Interim Consolidated Balance Sheet Amount Exceeds Acquisition Cost

  Stocks      2,772,975        992,007              1,780,968  
 

Bonds

     9,128,315        9,106,305        22,009  
 

Japanese Government Bonds

           7,335,374             7,334,260        1,113  
 

Japanese Local Government Bonds

     244,606        243,893        713  
 

Japanese Corporate Bonds

     1,548,334        1,528,151        20,182  
 

Other

     7,132,850        6,949,323        183,526  
 

Foreign Bonds

     5,767,481        5,709,351        58,129  
 

Other Debt Purchased

     40,343        39,640        703  
 

Other

     1,325,025        1,200,332        124,693  
    

 

 

    

 

 

    

 

 

 
 

Sub-total

     19,034,141        17,047,636        1,986,505  
    

 

 

    

 

 

    

 

 

 

Other Securities Whose Interim Consolidated Balance Sheet Amount Does Not Exceed Acquisition Cost

  Stocks      160,150        206,591        (46,441
 

Bonds

     13,305,641        13,362,767        (57,125
 

Japanese Government Bonds

     11,667,668        11,693,083        (25,415
 

Japanese Local Government Bonds

     250,336        250,822        (485
 

Japanese Corporate Bonds

     1,387,636        1,418,861        (31,224
 

Other

     9,430,457        9,686,257        (255,800
 

Foreign Bonds

     7,721,901        7,827,757        (105,855
 

Other Debt Purchased

     559,384        559,521        (136
 

Other

     1,149,170        1,298,979        (149,808
    

 

 

    

 

 

    

 

 

 
 

Sub-total

     22,896,249        23,255,616        (359,367
    

 

 

    

 

 

    

 

 

 

Total

       41,930,391        40,303,253        1,627,137  
    

 

 

    

 

 

    

 

 

 

 

(Note)

Unrealized Gains (Losses) includes ¥38,068 million which was recognized in the statement of income by applying the fair-value hedge method.

 

- 48 -


3.

Impairment (“Devaluation”) of Securities

Certain Securities other than Trading Securities (excluding Stocks and others without a quoted market price and Investments in Partnerships and others) are devalued to the fair value, and the difference between the acquisition cost and the fair value is treated as a loss for the six months ended September 30, 2021 (the fiscal year ended March 31, 2021) (impairment (devaluation)), if the fair value has significantly deteriorated compared with the acquisition cost (including amortized cost), and unless it is deemed that there is a possibility of a recovery in the fair value.

The amount of impairment (devaluation) for the fiscal year ended March 31, 2021 was ¥4,657 million.

The amount of impairment (devaluation) for the six months ended September 30, 2021 was ¥1,800 million.

The criteria for determining whether a security’s fair value has “significantly deteriorated” are outlined as follows:

 

   

Securities whose fair value is 50% or less of the acquisition cost

 

   

Securities whose fair value exceeds 50% but is 70% or less of the acquisition cost and the quoted market price maintains a certain level or lower

 

- 49 -


Money Held in Trust

 

1.

Money Held in Trust Held to Maturity

There was no Money Held in Trust held to maturity.

 

2.

Other in Money Held in Trust (other than for investment purposes and held to maturity purposes)

As of March 31, 2021

 

     (Millions of yen)  
     Consolidated
Balance Sheet
Amount
     Acquisition Cost      Difference      Other in Money
Held in Trust
Whose
Consolidated
Balance Sheet
Amount Exceeds
Acquisition Cost
     Other in Money
Held in Trust
Whose
Consolidated
Balance Sheet
Amount Does Not
Exceed
Acquisition Cost
 

Other in Money Held in Trust

       9,804          9,804        —          —          —    

 

(Note)

“Other in Money Held in Trust Whose Consolidated Balance Sheet Amount Exceeds Acquisition Cost” and “Other in Money Held in Trust Whose Consolidated Balance Sheet Amount Does Not Exceed Acquisition Cost” are components of “Difference.”

As of September 30, 2021

 

     (Millions of yen)  
     Interim
Consolidated
Balance Sheet  
Amount
     Acquisition Cost      Difference      Other in Money
Held in Trust
Whose Interim
Consolidated
Balance Sheet
Amount Exceeds
Acquisition Cost
     Other in Money
Held in Trust
Whose Interim
Consolidated
Balance Sheet
Amount Does Not
Exceed

Acquisition Cost
 

Other in Money Held in Trust

     25,702        25,702        —          —          —    

 

(Note)

“Other in Money Held in Trust Whose Interim Consolidated Balance Sheet Amount Exceeds Acquisition Cost” and “Other in Money Held in Trust Whose Interim Consolidated Balance Sheet Amount Does Not Exceed Acquisition Cost” are components of “Difference.”

 

- 50 -


Unrealized Gains (Losses) on Other Securities

Details of Unrealized Gains (Losses) on Other Securities on the interim consolidated balance sheet (consolidated balance sheet) are as follows:

As of March 31, 2021

 

     (Millions of yen)  
     Amount  

Difference between Acquisition Cost and Fair Value

     1,585,324  

Other Securities

     1,585,324  

(–) Deferred Tax Liabilities

     439,907  

Difference between Acquisition Cost and Fair Value, net of Taxes (Before adjusting for amount corresponding to Non-controlling Interests)

     1,145,417  

(–) Amount Corresponding to Non-controlling Interests

     16,783  

(+) Amount Corresponding to Net Unrealized Gains (Losses) on Other Securities Owned by Affiliated Companies, which is attributable to MHFG

     3,826  
  

 

 

 

Net Unrealized Gains (Losses) on Other Securities

     1,132,460  
  

 

 

 

 

(Notes)

   1.    The difference between acquisition cost and fair value excludes ¥32,481 million in gains which were recognized in the statement of income for the fiscal year ended March 31, 2021 by applying the fair-value hedge method.
  

2.

   “Other Securities” includes translation differences regarding Stocks and others without a quoted market price and Investments in Partnerships and others.

As of September 30, 2021

 

     (Millions of yen)  
     Amount  

Difference between Acquisition Cost and Fair Value

     1,617,495  

Other Securities

     1,617,495  

(–) Deferred Tax Liabilities

     448,400  

Difference between Acquisition Cost and Fair Value, net of Taxes (Before adjusting for amount corresponding to Non-controlling Interests)

     1,169,095  

(–) Amount Corresponding to Non-controlling Interests

     19,229  

(+) Amount Corresponding to Net Unrealized Gains (Losses) on Other Securities Owned by Affiliated Companies, which is attributable to MHFG

     4,889  
  

 

 

 

Net Unrealized Gains (Losses) on Other Securities

     1,154,756  
  

 

 

 

 

(Notes)

     1.      The difference between acquisition cost and fair value excludes ¥38,068 million in gains which were recognized in the statement of income for six months ended September 30, 2021 by applying the fair-value hedge method.
     2.      “Other Securities” includes translation differences regarding Stocks and others without a quoted market price and Investments in Partnerships and others.

 

- 51 -


Derivatives Information

Derivative Transactions not Qualifying for Hedge Accounting

With regard to derivative transactions not qualifying for hedge accounting, contract value or contractual principal equivalents, fair values and unrealized gains (losses) by type of transaction as of the interim consolidated balance sheet date (consolidated balance sheet date) are as follows. Contract value amounts do not indicate the market risk related to derivative transactions.

 

(1)

Interest Rate and Bond-Related Transactions

As of March 31, 2021

 

(Millions of yen)

 

Classification

  

Type

   Contract Value      Fair Value     Unrealized Gains
(Losses)
 
   Total      Over One Year  

Listed

   Interest Rate Futures                                                                                                                               
  

Sold

     5,352,260        3,517,173        (1,120     (1,120
  

Bought

     11,939,410        5,980,115        2,199       2,199  
   Interest Rate Options           
  

Sold

     239,583        6,863        (111     (3
  

Bought

     425,653        —          268       (315
   Bond Futures           
  

Sold

     165,894        —          556       556  
  

Bought

     175,412        —          (455     (455
   Bond Futures Options           
  

Sold

     18,048        —          (46     (46
  

Bought

     77,541        —          169       119  

Over-the-Counter

   FRAs           
  

Sold

     42,665,863        —          45,060       45,060  
  

Bought

     42,609,545        —          (46,135     (46,135
   Interest Rate Swaps           
  

Receive Fixed / Pay Float

     449,922,359        341,882,271        3,014,574       3,014,574  
  

Receive Float / Pay Fixed

     442,383,440        332,409,368        (2,817,850     (2,817,850
  

Receive Float / Pay Float

     147,723,342        121,666,164        5,791       5,791  
  

Receive Fixed / Pay Fixed

     291,810        235,502        (1,088     (1,088
   Interest Rate Options           
  

Sold

     13,900,704        9,346,439        (53,039     (53,039
  

Bought

     14,152,261        9,516,824        49,285       49,285  
   Bond Options           
  

Sold

     385,389        109,950        (8,336     (7,564
  

Bought

     385,457        109,950        8,610       7,707  
   Bond Other           
  

Sold

     8,120        —          (37     (37
  

Bought

     21,342        —          188       188  

Inter-Company or Internal Transactions

   Interest Rate Swaps           
  

Receive Fixed / Pay Float

     5,083,479        4,451,482        983       983  
  

Receive Float / Pay Fixed

     13,498,632        11,151,452        (106,637     (106,637
     

 

 

    

 

 

    

 

 

   

 

 

 

Total

     —          —          92,832       92,174  
     

 

 

    

 

 

    

 

 

   

 

 

 

 

(Note)

   The above transactions are marked to market, and changes in unrealized gains (losses) are included in the consolidated statement of income.

 

- 52 -


As of September 30, 2021

 

(Millions of yen)

 

Classification

  

Type

   Contract Value      Fair Value     Unrealized Gains
(Losses)
 
   Total      Over One Year  

Listed

   Interest Rate Futures                                                                                                                               
  

Sold

     6,431,909        4,887,354        5,103       5,103  
  

Bought

     15,943,916        8,021,160        (1,075     (1,075
   Interest Rate Options           
  

Sold

     660,001        30,498        (931     (299
  

Bought

     702,160        5,576        1,054       228  
   Bond Futures           
  

Sold

     390,559        —          2,363       2,363  
  

Bought

     283,272        —          (1,153     (1,153
   Bond Futures Options           
  

Sold

     738        —          (0     (0
  

Bought

     17,879        —          36       26  

Over-the-Counter

   FRAs