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Message from the Group CEO

As a "financial services consulting group," we aim to be the most–trusted partner in solving problems and supporting the sustainable growth of customers and communities. Yasuhiro Sato President & Group CEO Member of the Board of Directors Mizuho Financial Group, Inc.

As a financial services consulting group, we must thoroughly align ourselves with our customers' needs, be their best financial solutions partner, and shape the future of economies and societies.

Mizuho’s Ultimate Goal

Mizuho's Corporate Philosophy, "bringing fruitfulness for each customer and the economies and the societies in which we operate. Mizuho creates lasting value. It is what makes us invaluable," embodies our commitment to working as a united group to bring sustainable and stable financial growth to a wide range of customers and contribute to the development of economies and societies around the world.

We believe that the unchanging value we generate as a financial institution is firstly our ability to shape the future of economies and societies due to our capability to take measured risks and to provide financial intermediary functions, and secondly our ability to act as a superior financial partner, supporting customers in the pursuit of their dreams and hopes as well as guiding them towards solutions to their issues or concerns. Though business models may change with the times, the value generated by these abilities is unchanging and therefore we have incorporated them into our Corporate Philosophy which forms the basis for all of Mizuho's business activities.

In line with this Corporate Philosophy, in our medium–term business plan for fiscal years 2016 to 2018 we have positioned "becoming a financial services consulting group" as our ultimate goal.

Around the world, economic and societal change is taking place at a rapid pace. Consumer values are becoming more diverse, social structures are becoming more complex, and globalization continues to advance. Under these circumstances, customer needs are becoming more sophisticated and social expectations are rising from year to year. In order to meet these needs, we will work towards our goal of becoming a financial services consulting group by committing to being "a medium– to long–term financial partner, thoroughly aligned to our customers' needs, both their immediate needs and concerns as well as those which they have not yet realized, and drawing on our consulting capabilities to provide optimal solutions." Here I would like to share with you the progress we have made towards achieving the ultimate goal we have set out for Mizuho as well as the direction we will take going forward.

  • * Mizuho's Corporate Identity is composed of our Corporate Philosophy, Vision, and the Mizuho Values.

15 Years of Progress

April 2017 marked 15 years since Mizuho's formation.

Looking back over the past years, it is clear that Mizuho has been a trailblazer since our formation as Japan's first megabank in 2002. From 2012 we have been operating under a strategy of intragroup collaboration among our banking, trust banking, and securities entities. In 2014 we were the first Japanese megabank to adopt a "Company with Three Committees" model of corporate governance (prior to amendment of Japan's Companies Act, referred to as a"Company with Committees"model). Then in 2016 we became the first Japanese bank to adopt an in–house company system based on customer segments.

Recently, financial industry business models have been undergoing major change. In particular in the 2000s, primarily in the West, where the adoption of a non–traditional investment banking business model at first reaped huge profits only to collapse due to the sub–prime mortgage issue and resulting global financial crisis. Financial institutions had become distanced from customers' true needs. Thus, at the end of this period of excessive prioritization of financial and capital markets, financial institutions needed to reflect on their true purpose and seek to return to it.

With an understanding of the history that brought us to this point, Mizuho positioned the goal of fully implementing the "Customer First" principle at the core of our previous medium–term business plan and we are seeking to further pursue this goal in our current medium–term business plan.

I believe it is in Mizuho's DNA to be a trailblazer and we will draw on this quality in order to fully implement the "Customer First" principle by continually transforming our organization to thrive in the coming era.

The World is at a Major Turning Point


As for the business environment, the direction of the global economy remains unclear and unpredictable. Although there are expectations for a recovery, centered on the US, there is remaining uncertainty surrounding the policies of the new US administration, political issues in Europe, and trends in the Chinese economy. Also, many developed countries are experiencing depopulation, facing declining birthrates and an aging populace. Coupled with globalization, climate change, higher geopolitical risk around the world, the rise of anti–globalization sentiment, and issues surrounding income disparity and poverty, it is clear that major global economic and social structural changes are taking place. I believe we are at a major turning point. We cannot continue on in the same direction as before. We must transform our organization to enable us to weather these changes and thrive in the coming era.

With negative interest rates having been introduced in Japan and Europe, the business environment continues to be challenging for financial institutions. We will need to continue to keep a close eye on the possibility of a US interest rate hike and changes to international financial regulations which have been tightening since the global financial crisis. At the same time, advancements in digital technology have led to a push in many industries to further incorporate technology and this change has been both rapid and continuous. The financial industry is no different–Fintech startups and companies from other industries are emerging as new service providers of existing financial services, often in partnership with financial institutions. Needless to say, there is the potential for a major shift in financial institution business models.

Looking Back on the First Year of Our Medium–term Business Plan

We established our current medium–term business plan with the aim of creating a new business model in response to changes in the business environment.

In our plan, we identify "fully implementing the 'Customer First' principle" and "pursuing operational excellence" as two key concepts for attaining our goal of becoming a financial services consulting group. Additionally, the plan focuses on the progressive development of the One MIZUHO Strategy of collaboration among our banking, trust banking, and securities entities, which we introduced in the previous medium–term business plan.

In fiscal 2016, the first year of the current plan, we introduced an "in–house company system" as a means of furthering our efforts to fully implement the "Customer First" principle. This system has enabled us to better execute strategy based on customer segments, delegate authority to in–house company heads in order to speed up decision–making, and strengthen initiatives for increasing income on an in–house company basis, among other benefits.

After banking, trust banking, and securities, we identified asset management as the "fourth pillar" of the One MIZUHO Strategy. In the past fiscal year we consolidated the group's asset management functions in the newly established company, Asset Management One.

Similarly, we brought together the research and consulting functions which had been scattered throughout the group into a collective titled "One Think Tank" and established the Research & Consulting Unit as a means of strengthening the "fifth pillar" of our strategy. These were both major steps towards strengthening the group's consulting capabilities.

As for our pursuit of operational excellence, I am personally serving as the Chairman of the Operational Excellence Promotion Committee in order to lead our efforts to transform employee mindsets. In promoting operational excellence, we aim to increase the efficiency of our overall operations by simplifying and streamlining operations, speeding up decision–making, and making other improvements. By combining these efforts with initiatives for increasing the sophistication of our operations through the proactive incorporation of digital innovation, we aim to achieve not only a reduction in costs, but more importantly, enhance the value of the services we provide our customers. In fiscal 2016, some of the shortterm initiatives we advanced were those for streamlining and trimming down Head Office functions and those for revising our product and service offerings. We also fleshed out specific strategies and made progress towards medium– to long–term structural reforms by consolidating shared group functions and utilizing digital technology in order to transform our business processes.

Despite the challenging business environment in fiscal 2016, including negative interest rates, under our newly implemented inhouse company system Mizuho was able to increase non–interest net income on a group basis and make progress towards the disposal of cross–shareholdings. As a result, we achieved Profit Attributable to Owners of Parent of JPY603.5 billion, exceeding our projection of JPY600 billion set at the start of the fiscal year. We were also able to maintain a sufficient Consolidated Common Equity Tier 1 Capital Ratio (CET1 Capital Ratio) of 9.27%

  • * Basel III fully–implemented basis (based on current regulations), excluding Net Unrealized Gains on Other Securities.

Accelerating the One MIZUHO Strategy through Commitment to Customer–focused Business Operations and Fundamental Enhancement of Productivity

Though the business environment is likely to remain uncertain in fiscal 2017, it is an important year for Mizuho as we seek to position ourselves to succeed in the upcoming final fiscal year of our current medium–term business plan.

Our management policy for this fiscal year is to accelerate the One MIZUHO Strategy through commitment to customer–focused business operations and fundamental enhancements to productivity. We will implement a variety of initiatives in line with this management policy and the five basic policies under the medium–term business plan.

As a means of fully implementing the "Customer First" principle, we will work to further optimize the in–house company system as well as ensure that our actual business operations are in line with our policies and action plan regarding Mizuho's fiduciary duties. Also, in addition to our pursuit of operational excellence, we will implement fundamental structural reforms as a means of responding to changes in the global economic climate and the regulatory environment for financial institutions. And with an eye to preparing for the future beyond the period of our current medium–term business plan, we will devise and move towards the implementation of strategy with a focus on strengthening cost competitiveness and increasing Gross Profits. In terms of strengthening cost competitiveness, we will revise our channel strategy to optimize the way we provide in–branch, online, and mobile services. We will also transform business operations through the use of digital technologies such as blockchain, streamline and increase organizational efficiency on a group–wide basis, and implement IT system structural reforms, among other measures. As for increasing Gross Profits, our plans include significantly shifting management resources to areas with high profitability and growth potential, strengthening non–interest business, and utilizing digital technology to create new business. Another one of our top priorities is to ensure a stable and smooth migration to Mizuho's nextgeneration IT system. We have been carefully preparing for the system migration and are planning to roll out the new system to branches and departments in stages after completing a thorough migration rehearsal and other testing.

  • * Fiduciary duties is a general term for the broad range of various roles and responsibilities that fiduciaries are expected to fulfill when engaging in certain business activities, in order to live up to the trust that is placed in them by their customers.
Structural Reforms which Position Us to Succeed during the Current Medium-term Business Plan and Beyond

Continually Enhancing Corporate Value

In addition to these initiatives, it is essential that we continually strengthen Mizuho's corporate governance as this will not only support our efforts to become a financial services consulting group but also contribute to the ongoing enhancement of our corporate value. Mizuho has already proven to be a front–runner in corporate governance among Japanese financial institutions as a result of our efforts to strengthen the functions of our holding company and our early transition to the "Company with Three Committees" model. In June 2017, Mizuho became the first Japanese bank to appoint external directors for the positions of Chairman of the Board of Directors and Chairmen of all three legally required committees in Japan. In doing so, we have put in place a framework to ensure a more transparent and fair decision–making process as well as more effective supervision. Going forward, we will continue to ensure strict compliance with Japanese laws and regulations in addition to proactively implementing global best practices in terms of business operations and administration, as befitting a globally expanding financial group. Going forward, we will make every effort to further enhance the sophistication of our corporate governance.

We will also put an equally strong emphasis on enhancing employee engagement and embedding a robust corporate culture. At Mizuho, we strongly believe that a financial institution's most valuable asset is its people. We will continue to implement fundamental reforms in human resources management in order to maximize employee engagement throughout our entire workforce. As we transition to human resources management practices which respect and focus on the individual, we will promote diversity and inclusion as a means of supporting the advancement, development, and active participation of women, non–Japanese nationals, and other diverse talent. We will also put forward initiatives in areas such as flexible work arrangements and employee health management. In terms of corporate culture, I am confident that we will continue to cultivate a robust corporate culture through the accumulation of the day–today actions of each individual as we all remain aware of the Mizuho Values and seek to put them into practice. Each office will continue to identify their own specific goals in the form of an "office vision" and work towards achieving it. These efforts are another means of encouraging each individual employee to take proactive measures in order to exemplify the Mizuho Values.

Additionally, Mizuho is committed to addressing sustainability in a variety of fields, including social and environmental issues. Therefore, we aim to ensure that our corporate social responsibility (CSR) initiatives are strategic from a medium– to long–term perspective. Mizuho's CSR initiatives aim to contribute to the sustainable development of society which, in turn, creates a foundation for the creation of new corporate value and further development for Mizuho. That is why we have positioned CSR as a core component of our business activities. In recent years, more is expected of companies in terms of addressing social issues, especially considering the shared world–wide goals for sustainable development which are now in place such as the United Nations' sustainable development goals (SDGs) and the Paris Agreement, a new framework on climate change. Mizuho intends to meet these high expectations by running our business in a way that creates value for our stakeholders while simultaneously fulfilling our role within and duty to society. We will also proactively share information on our CSR activities and strengthen communication with stakeholders.

In Conclusion

As structural changes in the economy and society continue to advance at a rapid pace, Mizuho must always be at the forefront of this change. After all, it is in our DNA to be a trailblazer and we must maintain a broad and forward–looking perspective in order to foresee our customer' needs and predict further economic and social change. By identifying solutions and strategies for these needs and changes, we can work in close partnership with our customers to contribute to the sound development of local economies and societies. Through these actions, Mizuho can achieve a sustainable competitive advantage, enhance our corporate value, and continue to be an irreplaceable and reliable presence for all of our stakeholders: our shareholders and customers, the local societies in which we operate, and our employees and their families.

We appreciate your continued support and will do everything in our power to not only meet but exceed your expectations.

July 2017


Member of the Board of Directors
President & Group CEO
Mizuho Financial Group, Inc.