UPDATE 2-Mizuho may put off share buybacks - paper

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TOKYO Oct 23 (Reuters) - Japan's second-largest bank, Mizuho Financial Group (8411.T), may delay planned share buybacks to preserve capital in the face of global financial turmoil and sliding profits, a newspaper said, as its shares fell 12 percent.

Shares in major Japanese banks have fallen sharply in recent days, hit by widening concern that a stock market slump and increasing bad loans will force them to cut earnings estimates. [ID:nT335752]

Mizuho said earlier this year it would buy back up to 400 billion yen ($4 billion) of its own shares in the year to March 2009 to offset the conversion of preferred shares, which would otherwise dilute the holdings of existing shareholders.

It had bought back about 150 billion yen worth of the shares so far, but it is considering postponing the purchase of the rest to the next business year, the Asahi newspaper said.

Nomura analyst Keisuke Moriyama said in a note on Wednesday that Mizuho was unlikely to carry out an additional share buyback for the rest of this business year, citing a profit outlook and the bank's share price, which is far below the preferred share purchase price of 536,700 yen.

Shares of Mizuho were down 12.7 percent at 291,600 yen at 0403 GMT, underperforming a 7.6 percent slide in the Tokyo stock exchange's banking subindex .IBNKS.T.

Nomura also said the brokerage now expected Mizuho to fall far below its full-year earnings target, forecasting a 492 billion yen net profit versus the bank's own estimate of 560 billion yen.

The bank still planned to buy back some 800 billion yen worth of its own shares over a two-year period, Mizuho spokeswoman Masako Shiono said, but she would not comment on whether it might delay purchases until later in the period.

Mizuho has forecast a 23.5 percent decline in its net profit for the six months ended in September. The firm is scheduled to announce its first-half results on Nov. 13.

The bank's shares have lost almost one-third of their value this month, underperforming a 29 percent fall in the benchmark Nikkei average .N225. ($1=98.03 Yen) (Reporting by Taiga Uranaka; Editing by Hugh Lawson)