Mizuho Financial Group Inc. is considering buying an investment bank in Asia to help improve slow growth in winning equity and debt offerings in the region.
The lender’s expansion plans may also include allying with an investment bank and purchasing asset managers and hedge funds in Singapore, India and Indonesia, Chief Executive Officer Yasuhiro Sato said in an interview. He also plans to increase the branches in Asia outside of Japan to 50 from 33 within five years for its corporate banking unit.
Mizuho isn’t currently in talks with any banks for an acquisition or investment, he said.
Mizuho, ranked No. 22 in Asian equity underwriting this year, aims to tap corporate banking clients to boost fee income from advisory and underwriting as the domestic economy slows and loan demand slumps. The bank is yet to break into the top 10 for equity deals in the region since listing in the U.S. in 2006 in a bid to win more investment banking businesses.
“Our power to originate deals currently is still far from enough,” Sato, 59, said in an interview on Dec. 6. “We have to strengthen our capability in capital markets. It will be a big challenge to do it alone.”
Sato added he has no plan to sell Mizuho’s stake in Bank of America Corp., the second-largest U.S. lender by deposits, or add to its stake of BlackRock Inc., the world’s biggest asset manager.
Mizuho sank to 22nd in equity underwriting this year, excluding self-led transactions, from No. 13 last year and jumped to Asia’s No. 5 bond underwriter this year from No. 7. The bank this year climbed to No. 11 in Asian merger and acquisition advising with deals valued at $44.6 billion, including a merger between Sumitomo Metal Industries Ltd. and Nippon Steel Corp. That compares with ranking 38th last year, data compiled by Bloomberg show.
The bank’s first-half profit fell 25 percent on “persistently sluggish” spending by Japanese companies, Sato said last month as he announced plans to cut 3,000 jobs. Fees and commissions had also declined.
Mizuho Securities Co., its investment banking unit, had a loss of ¥26.7 billion for the six months ended Sept. 30, compared with a profit of ¥6.4 billion a year earlier.
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