(Recasts with president comments)
By Taiga Uranaka
TOKYO Feb 26 Mizuho Financial Group Inc
, Japan's second-largest lender by assets, is looking to
further expand overseas by acquiring either an Asian investment
bank or a U.S. commercial bank over the next three years.
"Possible targets include an Asian investment bank,
especially a bond market player," Mizuho President Yasuhiro Sato
told reporters in Tokyo on Tuesday. "We also have to take a
fresh look at the United States, whose economy, we expect, will
become very strong in next five years."
Japanese banks such as Mizuho are leveraging their ample
cash holdings to expand overseas to counter sluggish demand for
loans at home. The retreat of European rivals in the wake of the
debt crisis in the euro zone has also spurred lenders such as
Mitsubishi UFJ Financial Group Inc and Sumitomo Mitsui
Financial Group Inc to pick up assets around the world.
Mizuho is also looking to streamline its overall operations
and cut costs by merging its international and corporate banking
unit, Mizuho Corporate Bank, with its retail and small and
medium enterprises unit Mizuho Bank in July.
It has said the merger and other group reorganisation will
cut costs by 30 billion yen ($319.83 million) and boost revenue
by 60 billion yen over a three-year period.
Mizuho was created in 2000 by a merger of three banks, and
its structure as a holding company with two core banking units
has long been criticized as an inefficient way of splitting
management duties among the three lenders.
Sato, who became CEO of Mizuho Financial in 2011, has been
working to make the banking group more nimble and more
cost-efficient in the face of tepid loan demand at home.
Sato said domestic lending is likely to remain flat or grow
slightly over the next three years, while overseas loans are
expected to increase.
Citing huge overseas bad loan problems suffered by Japanese
banks in the past, Sato said his bank will stick to lending to
blue chip firms abroad, even though loan interest margins tend
to be thin for such borrowers.
He said Mizuho is trying to secure fatter profits by winning
bond and share issuance and other investment banking business
from these clients.
In its business plan for the three years starting in April
announced on Tuesday, Mizuho said it aims to report a net profit
of 550 billion yen for the year ending in March 2016. That's up
10 percent from the 500 billion yen forecast for the current
($1 = 93.8000 Japanese yen)
(Editing by Ryan Woo)