Mizuho Financial Group Inc. will delay the creation of Japan's third-biggest brokerage after losses related to U.S. subprime mortgages forced it to revise terms for merging Mizuho Securities Co. and Shinko Securities Co.
Mizuho Securities and Shinko will merge in May rather than January, the bank said in a statement to the Tokyo Stock Exchange. Losses caused by record defaults on U.S. subprime mortgages prompted a revision of terms, it said.
The meltdown in U.S. subprime mortgages has eroded earnings at Japanese financial firms, including Mizuho and Nomura Holdings Inc., the nation's biggest brokerage. Nomura posted its first loss in more than four years in October and lost 22 percent of its market value in the past six months. The nation's banking index slumped 25 percent in the same period.
Mizuho said earlier this month it may revise the terms of the transaction after its investment bank reported a first-half loss. Mizuho Securities lost ¥27.1 billion for the six months to Sept. 30, compared with a profit of ¥11 billion a year earlier.