MFG

Business Context and Reporting Period

This Form 6-K filing by Mizuho Financial Group, Inc. (Mizuho) serves as the convocation notice and reference materials for the 18th Ordinary General Meeting of Shareholders, held on June 25, 2020. The document reports on the fiscal year ended March 31, 2020 (FY2019), a period significantly impacted by the global spread of COVID-19. Mizuho is a major Japanese financial services group comprising banking, trust banking, and securities operations. The filing details the company's financial results, governance proposals, and strategic initiatives under its 5-Year Business Plan.

Key Financial Metrics (FY2019)

Note: The increase in Profit Attributable to Owners of Parent is largely due to the absence of extraordinary losses recorded in the prior fiscal year. Net Gains Related to Stocks improved significantly due to market conditions.

Material Changes and Operational Highlights

• COVID-19 Impact: Management recorded JPY 80.4 billion in additional reserves for possible loan losses as a forward-looking measure against the pandemic's economic impact. Despite this, the group achieved 108% of its target for Consolidated Net Business Profits.
• Capital Adequacy: The CET1 capital ratio stood at 11.65% as of March 31, 2020, ensuring a sufficient buffer. On a Basel III fully-effective basis, the ratio was 8.8%.
• Dividend Policy: Mizuho maintained its annual cash dividend at JPY 7.50 per share (JPY 3.75 year-end), prioritizing capital base strengthening while providing steady returns.
• Share Consolidation: The company proposed a 1-for-10 share consolidation effective October 1, 2020, to align the trading unit with Tokyo Stock Exchange desirable ranges (JPY 50,000–500,000) and enhance capital management flexibility.

Guidance, Outlook, and Governance

Strategic Outlook

Mizuho is executing its "5-Year Business Plan: Transitioning to the Next Generation of Financial Services." Key strategic pillars include:

• Structural Reforms: Accelerating business, finance, and corporate foundation reforms to build resilience and capture stable revenue streams.
• Sustainability: Committed to JPY 25 trillion in sustainable and environmental finance by FY2030. The group aims to reduce its outstanding credit balance for coal-fired power generation by 50% by FY2030 and to zero by FY2050.
• Digital Transformation: Continued investment in IT systems (e.g., MINORI core banking system) and digital channels to support remote operations and new business models.

Governance Proposals

The Board proposed the reappointment of 13 directors, including new independent outside directors. Notably, the Board opposes several shareholder proposals regarding climate change disclosure mandates, restrictions on dominant bargaining positions, and whistleblowing contact points, citing existing robust compliance frameworks and policies.

Risks and Contingencies

Management highlighted risks including prolonged economic downturns due to COVID-19, credit-related costs, foreign currency fluctuations, and the potential for reputational harm. The group maintains sufficient liquidity and capital to navigate these uncertainties.

Investor Verification Checklist

• Credit Reserves: Verify the adequacy of the JPY 80.4 billion additional loan loss reserves in light of evolving pandemic economic data.
• Share Consolidation Impact: Confirm the treatment of fractional shares and the impact on small shareholders (those holding fewer than 1,000 shares) following the 1-for-10 consolidation.
• Coal Financing Targets: Monitor progress against the target to reduce coal-fired power generation credit exposure by 50% by FY2030.
• Capital Management: Assess the balance between maintaining the current dividend level and the stated goal of strengthening the capital base for future returns.
• Shareholder Proposals: Review the Board's rationale for opposing shareholder proposals on climate disclosure and governance, as these reflect the company's current stance on ESG and shareholder rights.