By Kazuma Nagahara

Yomiuri Shimbun Staff Writer

Masahiro Kihara, president and group CEO of Mizuho Financial Group Inc., outlined management targets -- including raising the return on equity $(ROE)$ to over 12% by fiscal 2028, which will end in March 2029 -- during a company briefing for the media on Tuesday. The following is excerpted from his remarks at the briefing.

Catching up with global peers

Masahiro Kihara: In the previous fiscal year (ended in March 2026), profit attributable to parent company owners was 1.248 trillion yen, but this included various upward factors; on an underlying basis, I believe it was around 1.15 trillion yen. We had originally stated in our guidance that we expected 1.13 trillion yen, so our underlying performance has met that target. We would like to somehow push this up to 1.3 trillion yen.

Our ROE on an underlying basis is around 10.5%, and we have achieved the target we had previously set (to exceed 10% by fiscal 2027). As our next target, looking toward fiscal 2028, we aim for an ROE of 12%, assuming there is no increase in the Bank of Japan's policy interest rate. This is a fairly ambitious figure, but we must achieve this level to catch up with our global peers.

Japan is at a major turning point. Opportunities to restore our competitiveness are emerging, such as the 17 strategic fields targeted for concentrated investment outlined by the administration of (Prime Minister Sanae) Takaichi. To achieve this, we will connect various economic actors -- including large corporations, mid-sized companies, small businesses and startups -- to build a resilient competitive edge for Japan. At the same time, international collaboration is crucial; we aim to serve as a bridge for Japanese and overseas companies to drive the next phase of growth.

Additional buybacks, Middle East situation

Kihara: I'd like to clarify this since there seems to be a lot of misunderstanding: There has been no change in our shareholder return policy. We first carried out a 100-billion-yen buyback, perhaps giving the market the impression that "this is the end of it." However, our stance remains unchanged; we aim for a total return ratio of 50% or more. I believe we should proceed with additional buybacks while monitoring how the situation in the Middle East unfolds.

Assuming we achieve (our target) profit of 1.3 trillion yen, we can return 650 billion yen to shareholders and retain the remaining 650 billion yen as internal reserves. If we assume that we own capital worth approximately 10% of risk assets, this means we can still increase risk assets by 6.5 trillion yen. I do not believe we are being forced into difficult operations (regarding securing funds for growth investments).

In maintaining a loan-to-deposit ratio of 50%, we currently have room to expand lending. However, competition for deposits remains fierce, and we must implement measures to steadily increase our deposit balances.

Overseas operations

Question: Last year, you announced the acquisition of Avendus (Capital Private Ltd.) among other investments. What are the prospects for overseas operations going forward? Are there any new developments?

Kihara: What we have been doing in our overseas operations is building investment banking capabilities, primarily in the Americas. Our acquisitions of Greenhill (& Co.) and Avendus in Asia were to strengthen our investment banking operations. We are still only halfway there, but we have secured most of the necessary pieces. The question now is whether we can connect those pieces and create new value. I do not believe there will be many inorganic (merger and acquisition) opportunities overseas going forward.

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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.

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May 21, 2026 06:35 ET (10:35 GMT)

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