November 14, 2018 / 6:51 AM / a year ago

Japan's Mizuho reports flat second-quarter, hurt by weak lending business

FILE PHOTO: Pedestrians are reflected on Mizuho Bank's signboard in Tokyo, Japan, January 25, 2017. REUTERS/Kim Kyung-Hoon/File Photo

TOKYO (Reuters) - Mizuho Financial Group Inc (8411.T) on Wednesday reported flat growth in net profit in the three months through September, hurt by weak domestic lending in a prolonged ultra-low interest rate environment.

The results come as Japan’s second-largest lender by assets - but least profitable among the top three - tries to cut costs and improve profitability under new chief executive Tatsufumi Sakai.

Japanese banks are struggling to expand in the domestic lending business while the central bank continues to pursue an interest rate policy aimed at stimulating the economy. In search of revenue, they have been increasing fees for services such as corporate transactions and retail financial product sales.

For July-September, Mizuho’s profit was 198.34 billion yen ($1.74 billion), from 198.35 billion yen in the same period a year earlier, showed Reuters calculations based on the bank’s six-month cumulative earnings release.

Mizuho said profit rose 13.4 percent in the first half of the year.

For the full-year through March, Mizuho kept its profit forecast at 570 billion yen, down 1.1 percent from the year prior but above the 567.1 billion yen average of 14 analyst estimates compiled by Refinitiv.

On Tuesday, market leader Mitsubishi UFJ Financial Group Inc (8306.T) reported a 0.6 percent decline in second-quarter profit. It also raised its full-year view by 100 billion yen, but cited the ongoing Sino-U.S. trade war as well as growing market volatility as risks to second-half performance.

Reporting by Taiga Uranaka; Editing by Christopher Cushing

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