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Medium–term Business Plan

Progress of the Medium–term Business Plan

In fiscal 2016, Mizuho began to implement its three–year medium–term business plan, entitled Progressive Development of "One MIZUHO" —The Path to a Financial Services Consulting Group.

Under the new medium–term business plan, Mizuho will perfect the One MIZUHO Strategy by creating a new business model as a financial services consulting group. The two foundations for this effort will be the full implementation of the "Customer First" principle promoted in the previous medium–term business plan and the pursuit of "operational excellence." Mizuho has also defined 5 basic polices based on medium–term risk appetite policy and business portfolio analysis and 10 basic strategies as specific representations of those 5 policies with regards to business strategy, financial strategy, and management foundations.

In the plan’s first year (fiscal 2016), the group united in taking action based on the management policy of "strengthening our foundation for establishing a sustainable competitive advantage."

Mizuho's Risk Appetite Framework (RAF)

Mizuho has positioned the RAF as the management control framework to support optimization of orderly risk–taking and risk–return. Specifically, we will further concretely define our risk appetite* in establishing our medium–term and fiscal year business plans. The risk appetite will be the basis for establishing our business strategy, resource allocation, and budget, thus integrating risk management, business strategy, and profits in order to maximize our risk–return.

  • *Risk appetite consists of a risk appetite policy that serves as the fundamental policy regarding our risk–taking activities and risk appetite metrics that serve as means of quantifying the level of risk–taking based on the risk appetite policy.
Essence of New Medium–term Business Plan Based on Our RAF

Fully Implementing the "Customer First" Principle
–Introduction of the In–house Company System–

The needs of customers and society are becoming increasingly sophisticated with the rapid changes taking place in the global economic and social environment. In order to satisfy these needs, Mizuho must provide optimum solutions by fully implementing our "Customer First" principle, and by fully deploying the consulting capabilities of the group's asset management and research & consulting functions, in addition to the banking, trust banking, and securities functions.

To thoroughly strengthen our "Customer First" principle approach and to realize our goal of becoming a financial services consulting group, we have introduced a new in–house company system.

Specifically, Mizuho has established five in–house companies that formulate and implement group–wide strategies across banking, trust banking, securities entities, etc. for each customer segment. Product and research functions have been reorganized into two independent units to enhance expertise and promote utilization across all the in–house companies.

In fiscal 2016, the first year for the in–house company system, we were able to move forward steadily with putting in place infrastructure and various types of frameworks. As a result, we have achieved our initial objectives with positive benefits such as strategy execution based on customer attributes, speeding up of decision making by delegating authority to company heads, and strengthening of measures to increase each in–house company's profitability.

Starting in fiscal 2017, we are addressing higher–level themes such as optimizing personnel allocation/collaboration between in–house companies and further reforming our cost/personnel structure. As our in–house company system operations increase in sophistication, we will be even better able to satisfy customer needs.

Measures to Increase Sophistication of In–house Company System Operations

Pursuing Operational Excellence

In order to bring a sustainable competitive advantage to Mizuho, we are pursuing operational excellence by improving operations that provide the driving force for our strategies together with our "Customer First" principle strategy.

To accomplish this, we will thoroughly review our existing business processes, revise our channel strategy for branch and online/smartphone services, consolidate common operations, and incorporate technology innovation (Fintech, etc.) and new ideas. With such initiatives, we aim to improve operational efficiency and to enhance service value for customers by raising the sophistication of our operations.

In fiscal 2016, Mizuho made steady progress on problem–solving–type measures aimed at streamlining Head Office functions and revising products and services. We also moved forward with structural–reform–type measures such as consolidation of group common operations and innovation of business processes using digital technology. Along with these, steady change was also seen in each individual employee's mind–set with respect to everyday work.

Going forward, we will further accelerate employee mind–set reforms, while also moving to execute particularly structural–reform–type measures.

Measures for Achieving Operational Excellence

Selecting and Focusing of Business Areas

In order to optimally allocate limited management resources and achieve sustainable growth, in fiscal 2016 we clarified focus areas and areas to streamline by analyzing our business as a whole based on market attractiveness and Mizuho's competitive advantages. Going forward, we will move to steadily shift management resources from the areas to streamline to the focus areas. This should lead to increased profitability.

Selecting and Focusing of Business Areas

1 Risk asset2 Bond underwriting3 Equity underwriting

Embedding a Corporate Culture that Encourages the Active Participation of Our Workforce

In order to create a sustainable competitive advantage by strengthening the workforce that supports Mizuho, in fiscal 2016 we moved forward with a variety of measures for the establishment and spread of the fundamental reform of HR management to promote active participation of all employees. We also promoted measures for the establishment of a strong corporate culture that encourages all employees to take initiative. We will continue to implement and strengthen measures such as these.

Embedding a Corporate Culture that Encourages the Active Participation of Our Workforce