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UPDATE 2-Japan's Mizuho hikes dividend forecast for first time in 6 years
January 31, 2014 / 7:46 AM / in 4 years

UPDATE 2-Japan's Mizuho hikes dividend forecast for first time in 6 years

(Recasts, adds company comment)

* Raises FY dividend view to 6.5 yen/share vs 6.0 yen

* Keeps FY view at Y600 bln vs Y638.3 bln analyst estimate

* Apr-Dec net profit Y563.1 bln, 94 pct of FY goal

* Oct-Dec net down 36 pct at Y133.4 bln as stocks income dips

By Taiga Uranaka

TOKYO, Jan 31 (Reuters) - Mizuho Financial Group Inc raised its dividend forecast for the first time in six years after stock-related income pushed nine-month earnings just 6 percent shy of the bank’s full-year profit goal.

The Japanese lender, like bigger rival Mitsubishi UFJ Financial Group Inc, has booked a steep rise in brokerage commissions since the end of 2012 when shares prices shot up ahead of the election of a pro-growth government.

The subsequent year-long market rally has also pushed up the value of shares Mizuho owns and helped the bank turn around a string of deep stock-related losses.

As a result, Mizuho on Friday said net profit rose 43.7 percent in April-December to 563.1 billion yen, just short of the bank’s target for the business year ending March - a seven-year high of 600 billion yen.

The bank also said it raised its full-year dividend forecast to 6.5 yen per share from 6.0 yen, which would be the first hike since 2008.

“We are raising our dividend forecast,” said a Mizuho spokeswoman, as “we are now confident that we can comfortably clear our full-year profit forecast.”

Shares of Mizuho closed up 0.9 percent ahead of the earnings release, compared with a 0.6 percent decline in the benchmark index.

STOCK RALLY

Japanese stocks are still rising a year on from the election. The average daily trading value on the Tokyo Stock Exchange doubled on year in October-December, during which time the benchmark Nikkei Stock Average hit a six-year high.

That helped Mizuho, whose stock portfolio includes Dai-ichi Life Insurance Co and Nippon Steel & Sumitomo Metal Corp, book stock-related profit of 15.6 billion yen in the third quarter.

But that compared with 151.6 billion yen a year earlier when the stock market rally began, pushing net profit down 36 percent in October-December to 133.4 billion yen, Reuters calculations show based on nine-month figures.

For the first and second quarters combined, stock-related profit reached 27.3 billion yen from a loss of 274.5 billion yen.

At Mizuho’s brokerage unit, investors drawn by the stock rally led to a surge in income from commission fees, pushing the unit’s net profit to 47.2 billion yen in April-December from 7 billion yen a year prior.

For the full year, Mizuho on Friday kept its profit forecast at 600 billion yen, 7 percent higher than the year earlier.

That would compare with the 638.3 billion yen mean estimate of 18 analysts polled by Thomson Reuters, which would be the highest profit since 2006.

Japanese banks typically revise forecasts in the fourth quarter after making additional provisions for bad loans. (Editing by Christopher Cushing)

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