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Corporate & Institutional Company

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Head of Corporate & Institutional Company Kosuke Nakamura

We aim to be our customers' most trusted and reliable partner by focusing our collective strengths to provide solutions for their diverse and increasingly sophisticated issues and needs.

Medium– to Long–term Company Strategy

The outlook of the global economy is very uncertain and factors such as the tightening regulations regarding the balance sheets of financial institutions make our business environment even more uncertain.

In addition, with increasing demand for improved corporate governance, our customers' cross–border and cross–sector needs are becoming increasingly complicated and diverse as globalization and business restructuring across industries pick up speed.

The Corporate & Institutional Company's strengths are the strong relationships we have built with our customers, the sophisticated risk–taking capabilities we have accumulated through developing new financial businesses, and a well–established style of offering comprehensive solutions based on our One MIZUHO Strategy that integrates banking, trust banking, and securities functions.

On the other hand, although we do have strengths in the real estate sector, we are still in the process of consolidating our position in trust banking and some areas of our securities business need further strengthening, such as participation in large–scale deals with a focus on cross–border M&As.

Taking into account the persisting external uncertainties, it is essential that we strengthen our focus areas by rebalancing the allocation of assets and personnel, and build a robust and profitable business portfolio that can withstand future downside risks.

Recognizing this, we will further develop the One MIZUHO Strategy and transform our business model into one that creates a greater value chain. Instead of simply getting deeply involved in just one of our customer's business issues, the entire group will work together to address customer's various management challenges. For example, in addition to M&A, we will work as a group to support growth, and, at the same time, maximize our business opportunities. Ultimately, we want to be seen as their long–term partner who can address subsequent issues such as currency hedging, financing, and post–M&A integration.

In order to transform our business model, it is essential that we have an ongoing commitment to enhancing our customer's corporate value. It is also essential that we have a broad perspective so that we are sensitive to changes in the social and business environments in addition to the customer's individual issues. We must have both a micro– and a macro–approach. At the same time, we need long–term initiatives to develop human resources capable of creating new value chains, as well as the mobility to flexibly allocate resources such as assets and personnel in a timely manner so that we do not let opportunities go to waste. This will be done by making full use of the advantages of the in–house company system, which enables coherent strategy planning and prompt decision making.

Through such initiatives, we will aim to be our customers' most trusted and reliable global partner and to contribute to the growth of global economies. We will continue to support our customers' sustainable growth with our comprehensive lineup of financial solutions.

Fiscal 2016 Results and Plans for Fiscal 2017 and Beyond

The in–house company system was launched in fiscal 2016 under new business conditions such as negative interest rate policies. In spite of the unfavorable business environment, we made a steady progress in responding to stricter regulations regarding the balance sheets and demand for more effective corporate governance, in addition to success in winning mandates for large–scale M&A deals. As a result, we achieved our Net Business Profits target of JPY240 billion. We performed impressively in the league tables, holding onto the top slot for two consecutive years for Japan straight bonds and municipal bonds (underwriting amount) and for M&A (with any Japanese involvement, number of transactions), and moving into the top slot for M&A (with any Japanese involvement, amount).

The reduction of cross–shareholding is one of our most important management issues, and we were approximately JPY25 billion ahead of schedule in our cumulative reduction targets for fiscal 2015 to 2016. We also displayed appropriate risk–taking capabilities utilizing our expertise on industries, and aggressively allocated assets to high–profitability sectors such as hybrid financing. In addition, we proactively reallocated human resources from the Head Office to key business segments that are selected based on growth potential and profitability. We also made efforts to reinforce group–wide business promotion, such as collaborating with the national government or local public entities to introduce PPP/PFI (private–public) and industry–academia collaborations in growth industries.

However, we are still in fourth place in the league table for equity–related business, and we are faced with the challenge of improving our presence in this segment as well as the high–profitability securities business such as cross–border M&A.

In fiscal 2017, our company will promote cross–border M&A business by reinforcing global sector collaborations. This will give impetus to the business model transformation that we are aiming for. M&A presents the opportunities for the securities business, as well as being the all–important starting points of value chains. This strategy will be powerfully promoted as our most important theme for fiscal 2017. Specifically, we will work with the Global Corporate Company and enhance global collaboration of regional sector bankers. The newly established position of executive officer in charge of specific global corporations in MHBK will take the lead in global marketing.

We will rebalance our resource allocation and promote business process innovation through group–wide operational excellence. For example, we aim to fundamentally change our business promotion style by upgrading our business infrastructure, incorporating mobile technologies and constructing a real–time data sharing platform.

By implementing these strategies, we will accelerate initiatives to transform our business model and build a robust business portfolio.

1. Current Environment

External Environment

Economy, Regulations, and Competition
  • Increasing uncertainty in the global economy, changes in the business environment as a result of negative interest rate policies
  • Stricter regulations regarding the balance sheets of financial institutions
  • Increasing convergence of strategies of our competitors
Customers
  • Increasing need for capital and growth strategies that pay due attention to globalization and interests of stakeholders
  • Unclear business outlooks as a result of rapid transitions in the business environment
Society
  • Increasing public–private–sector collaboration in areas such as agriculture and the revitalization of regional economies

Internal Conditions

Strengths
  • Ahead of our competitors in the integrated operation of banking, trust banking, and securities functions
  • Sophisticated risk–taking capabilities accumulated through developing new financial businesses
  • Strong relationships with customers among large corporations, financial institutions, and public–sector entities
  • Accelerating our initial plan to reduce cross–shareholdings
Challenges
  • Streamlining marketing system and work processes
  • Further strengthening our trust banking and securities business, such as cross–border M&A
  • Rebuilding our business portfolio by rebalancing resources

2. Value Creation

Value for Customers

  • Provide optimal solutions that promptly address customers' diverse issues and needs
  • Continue support in enhancing our customers' corporate value through the value chain business model
  • Provide risk money based on sophisticated risk–taking capabilities

Value for Society

  • Provide a stable and steady flow of funds to large corporations, financial institutions, and public–sector entities to help boost economies
  • Contribute to the revitalization of the Japanese economy by fostering new industries, reorganizing existing industries, and revitalizing regional economies
  • Facilitate infrastructure development through PPP/PFI (public–private–sector)

3. Business Plans

Risk Appetite Policy

  • Invest resources strategically and flexibly in key sectors
  • Rebuild our business portfolio through selective risk taking
  • Thoroughly enforce our compliance system that underpins our strategies and reinforce asset controls

Action Plans

  • Strengthen cross–border M&A business through global industry sector collaborations
  • Accelerate business model transformation by rebalancing asset portfolio based on growth potential and profitability
  • Streamline work procedures and business promotion style by putting operational excellence into practice

2016 HIGHLIGHTS

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  • *FY2016 results recalculated based on FY2017 management account rules
League Tables
  FY2015 results FY2016 results FY2018 plan
Japan straight bonds and municipal bonds (underwriting amount) 1st 1st 1st
M&A (deals involving Japanese companies) (No. of deals) 1st 1st 1st
M&A (deals involving Japanese companies) (amount) 7th 1st Top 5
Total equity underwriting worldwide (underwriting amount) 3rd 4th 2nd

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  • *Rounded figures, management account

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  • 1.Shares listed on the Japanese stock markets, acquisition cost basis
  • 2.The Corporate & Institutional Company's book values after the end of March 2017 reflect the transfer to the Retail & Business Banking Company.

Solutions that Support Sustainable Growth for Our Customers and Society

Collaboration with the National Institute of Advanced Industrial Science and Technology (AIST)

Based on a partnership agreement concluded in December 2015 with AIST, MHBK implemented initiatives intended to foster key regional companies. These initiatives included holding open innovation seminars and business matching events for customers.

We will continue to implement initiatives that promote innovations aimed at boosting Japan's growth potential and revitalizing regional communities.

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Signing of the partnership agreement with AIST

Successful Case of a Cross–border M&A Value Chain Business

Mizuho provided integrated support as a group for a customer, who overtook an overseas competitor after years of deliberations. MHSC was appointed FA1 and MHBK arranged the currency hedging and financing.

This case is a good example that shows how Mizuho earned the custom–er's trust through years of discussions, and how highly the group's integrated ca–pabilities are regarded. We will continue employing our comprehensive strengths in supporting customers en–hance their corporate value.

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  • 1.Financial advisor
  • 2.Post–merger integration