Mizuho Financial Group Inc. is counting on fee businesses to make up for lower returns from lending and bond investments in the wake of the Bank of Japan's decision to adopt a negative interest-rate policy.
"Noninterest income will grow significantly as we move into new businesses" in the negative-rate environment, Chief Executive Officer Yasuhiro Sato said in an interview at the bank's Tokyo headquarters last week. Sato said this could offset the ¥40 billion that he expects the BOJ's policy will shave off income from businesses such as lending this fiscal year.
With returns from lending diminishing, Mizuho is forecasting profit will decline 11 percent this fiscal year, underscoring why it is seeking to boost income from areas such as investment banking, trust banking and brokerage services. The Tokyo-based bank has bolstered its securities operations by hiring staff at home and abroad, particularly in the United States, where it is trying to gain market share by capitalizing on other firms scaling back.