By Kazuma Nagahara / Yomiuri Shimbun Staff Writer
Japanese megabank Mizuho Financial Group Inc. aims to increase its return on equity $(ROE)$ to around 11.5% to 12% from the current level of over 9% by fiscal 2028, which ends March 2029, according to President and Group CEO Masahiro Kihara during a recent interview with The Yomiuri Shimbun.
Mizuho is seeking to improve its capital efficiency further, as it expects that its current ROE goal -- over 10% by fiscal 2027 -- will be achieved ahead of schedule. Kihara said that ROE for fiscal 2025 is expected to be "somewhere above 10% and below 10.5%."
Mizuho sees its fiscal 2025 net income reaching 1.13 trillion yen, boosted by the Bank of Japan's interest rate hikes and other factors. That figure would be the highest since Mizuho formed its current corporate group structure in 2000. The increase in net income would also help increase ROE.
Mizuho laid out the target of achieving over 10% ROE by fiscal 2027 in its medium-term financial goals, which the group announced in May this year. After less than a year, it was likely that the target would be achieved, and Kihara became intent on setting a new goal for fiscal 2028.
"I suppose investors are wondering what target we will set for fiscal 2028," he said.
Kihara stated that the goal would likely be set "in a range which is both ambitious and rational." The CEO added that his "gut tells him to set the goal at around 11.5% to 12%."
While Mitsubishi UFJ Financial Group Inc. has already revealed a plan to increase its ROE to about 12% in the medium and long term, Kihara said he was not influenced by the policies of other megabanks.
"I'm looking at things from the perspective of increasing our price-to-book ratio $(PBR)$ by 50%," Kihara said.
Supporting investment from public, private
The Japanese government is trying to attract domestic and foreign investment into fields that are important for the country's industrial competitiveness, such as semiconductors and green transformation. Both the public and private sectors have pinned high hopes on Mizuho to discover promising small and medium-sized enterprises in regional areas and make them clients, as Mizuho is the only Japanese megabank to have at least one branch in all 47 prefectures.
"At Mizuho, we have our long-standing Industry Research Department, where we passionately discuss things like how Japan's industrial structure should be and ways to create a winning formula for the nation," Kihara said. "The administration of Prime Minister Sanae Takaichi plans to promote investment from the public and private sectors, which will suit what we have been doing very well."
"We want to firmly support investments from the public and private sectors. Needless to say, there are promising companies in regional areas, so we would like to assist them," he added.
Hopes are high that investment from abroad will increase. "The momentum is growing for Japan to increase its national power," Kihara said. "Now is a good time to invest (in Japan), so I hope (investors) will pay attention."
Top 10 within reach
Earlier this month, Mizuho announced it will acquire a majority stake in Indian investment bank Avendus Capital Private Ltd. for up to 81 billion yen. In 2023, it acquired U.S. investment bank Greenhill & Co.
The number of mergers and acquisitions the megabank is expected to complete in fiscal 2025 is about 60% more than in fiscal 2024, according to Mizuho.
Mizuho ranked 11th in a major global investment banking league table for the first half of fiscal 2025. Kihara said it is now "within reach" to achieve its goal of entering the top 10.
"The addition of Avendas, which has deep relationships with Indian entrepreneurs, will generate synergies," Kihara said. "We will connect investments from Japanese companies (to India) through Avendas."
----
This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.
YDN-M0000168891-1
(END) Dow Jones Newswires
December 29, 2025 03:21 ET (08:21 GMT)
Copyright (c) 2025 The Yomiuri Shimbun
Comments