MFG

Business Context and Reporting Period

Company: Mizuho Financial Group, Inc. (MHFG)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Fiscal Year ended March 31, 2014 (12th Fiscal Year)
Document Date: June 2, 2014

This filing serves as the convocation notice and reference materials for the 12th Ordinary General Meeting of Shareholders. It details the Group's performance for the fiscal year ended March 31, 2014, which was the first year of the "One MIZUHO New Frontier Plan." Key operational developments included the merger of the former Mizuho Bank, Ltd. and Mizuho Corporate Bank, Ltd. into a single entity (Mizuho Bank, Ltd.) on July 1, 2013, and the implementation of unified strategies across banking, trust, and securities businesses.

Key Financial Metrics

Capital Adequacy (as of March 31, 2014):

• Total Capital Ratio: 14.35%
• Tier 1 Capital Ratio: 11.35%
• Common Equity Tier 1 (CET1) Capital Ratio: 8.79%

Dividends Proposed:

• Common Stock: JPY 3.50 per share (Final), totaling JPY 6.50 per share for the fiscal year (including interim).
• Eleventh Series Class XI Preferred Stock: JPY 10.00 per share.

Material Changes vs. Prior Period

• Profitability Surge: Consolidated Net Income increased by JPY 127.8 billion year-on-year to a record high of JPY 688.4 billion. Ordinary Profits rose significantly to JPY 987.6 billion.
• Asset Quality Improvement: Consolidated Credit-related Costs were a reversal of JPY 112.8 billion, compared to a provision in the prior year. The Non-Performing Loan (NPL) ratio improved to 1.21% from 1.71%.
• Stock Valuation: Net Gains (Losses) related to Stocks substantially improved, driven by a decrease in impairment losses.
• Organizational Restructuring: The merger of the two former banks created a streamlined Mizuho Bank, Ltd., enhancing the ability to provide comprehensive financial solutions. The Group also moved to a new capital structure placing major subsidiaries under direct control of the holding company.

Guidance, Outlook, and Governance Changes

Corporate Governance Transformation: The Board proposes a partial amendment to the Articles of Incorporation to transform MHFG into a "Company with Committees." This change aims to:

• Establish Nominating, Audit, and Compensation Committees.
• Eliminate the Board of Corporate Auditors.
• Delegate decision-making authority on dividends and surplus distribution to the Board of Directors (rather than the General Meeting) to enhance management flexibility.
• Shorten the term of office for Directors from two years to one year.

Management Commentary & Risks: Management emphasizes a "disciplined capital management" policy balancing capital base strengthening with shareholder returns. The Group acknowledges the risk of price fluctuations in securities affecting CET1 capital and the tightening of global regulations. The Board opposes all shareholder proposals (Proposals 4-12), including requests for higher dividends and amendments regarding anti-social elements and foreign investor discrimination, citing existing compliance frameworks and capital adequacy.

Investor Verification Checklist

• Dividend Conflict: Verify the conflict between Proposal 1 (Company: JPY 3.50 final dividend) and Proposal 5 (Shareholder: JPY 5.00 final dividend). Voting for both is deemed invalid.
• Governance Vote: Confirm the approval of the transformation to a "Company with Committees," which fundamentally alters the supervisory structure and dividend approval process.
• Capital Ratios: Review the CET1 ratio of 8.79% against Basel III requirements and the Board's justification for maintaining the current dividend level despite record profits.
• Compliance History: Note the Group's ongoing efforts to address the 2013 business improvement order from the Japanese Financial Services Agency regarding transactions with anti-social elements.
• Director Appointments: Review the slate of 13 proposed Directors, including 6 Outside Directors, and their independence standards.