(Adds quarterly net profit figures)
* Q2 net profit Y356 mln vs Y158.3 bln a year earlier
* Hurt by heavy losses on equity portfolio
* Keeps FY net profit forecast at Y500 bln
TOKYO, Nov 14 Mizuho Financial Group,
Japan's No.2 bank by assets, posted a 99.8 percent plunge in its
second-quarter net profit, hammered by hefty losses on its
equity portfolio while lending at home remained sluggish amid a
Net profit fell to 356 million yen ($4.5 million) in
July-September from 158.3 billion yen a year earlier, according
to Reuters calculations based on first-half earnings released by
the bank on Wednesday.
Japanese banks including Sumitomo Mitsui Financial Group
and Mitsubishi UFJ Financial Group own stakes
in hundreds of their corporate clients, making the lenders
vulnerable to stock market swings. The banks have to book
impairment charges when the market value of the stock slides far
below the value on their books.
Lending operations in Japan, which still account for the
bulk of profits for Mizuho and other top banks, continued to be
a drag on earnings because of weak demand for loans.
Japan's economy shrank in the September quarter for the
first time since last year, adding to signs that slowing global
growth and tensions with China are nudging the world's
third-largest economy into recession.
Net profit fell to 184.3 billion yen in April-September from
254.7 billion yen a year earlier, said Mizuho, the first among
the country's top three banks to announce first-half earnings.
First-half stock-related losses widened to 227.6 billion yen
from 60.6 billion yen a year earlier, Mizuho said.
For the full year to March 2013, Mizuho kept its net profit
forecast at 500 billion yen, compared with an average estimate
of 473 billion yen in a poll of 18 analysts by Thomson Reuters.
Shares of Mizuho have climbed some 17 percent so far this
year, outperforming a 2.5 percent rise in the benchmark Nikkei
One bright spot has been its overseas growth.
With little exposure to Europe's debt crisis, Japanese banks
are seen as better positioned to take advantage of their
European rivals' retreat in Asia and other regions.
In June, Mizuho said it had agreed to buy a Brazilian unit
of Germany's WestLB.
($1 = 79.4400 Japanese yen)
(Reporting by Taiga Uranaka; Editing by Ryan Woo)