Global Markets Company

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Masatoshi Yoshihara Co-Head of Global Markets Company Yasuhiro Shibata Co-Head of Global Markets Company

As a partner with expert knowledge of market mechanisms and the ability to draw on a range of intermediary functions, we will further integrate our banking, trust banking, and securities capabilities to offer the best products and services for our clients' varied needs.

Basic policy

The Global Markets Company engages in sales and trading (S&T) in order to provide clients with market product-based solutions, and we also conduct banking operations, including asset and liability management, securities investment, and other related activities.

We have set out a basic strategy to develop a framework for offering optimal products and services, as well as to strengthen our market presence.

In our S&T operations, by optimizing our global network and products framework, we will provide a broad range of intermediary functions. In our banking operations, we will enhance the sophistication of our flexible ALM and portfolio management while maintaining a focus on achieving a balance between realized gains and unrealized gains/losses.

Business environment and challenges

According to projections from the International Monetary Fund, the global economy is expected to stabilize and achieve growth of 6.0% in 2021. However, gaps in recovery between countries are widening, and a high level of uncertainty continues. While the economy is likely to return to normal as a result of the fiscal and monetary policies of each country, as well as the rollout of COVID-19 vaccines, the structure of the market appears to be undergoing considerable changes with a growing interest toward whether the US Federal Reserve Board will phase out monetary easing policies amid concerns over a rise in inflation rates.

In this environment, we will strive to consistently respond to our clients' increasingly varied risk hedging needs and investment needs. At the same time, we will also strive to enhance our ALM and portfolio management and promote sustainability in each field.

Trends in performance

Our Net Business Profits fell temporarily in fiscal 2018 when we began restructuring our securities portfolio amid such factors as a shrinking difference in long- and short-term interest rates in the US. However, as a result of our ALM and portfolio management based on a balance between realized gains and unrealized gains/losses, as well as further promoting our strategy to integrate banking and securities businesses, we recorded high Net Business Profits at JPY207.8 billion in fiscal 2019 and JPY268.2 billion in fiscal 2020. We expect to achieve Net Business Profits of JPY253 billion in fiscal 2021.

  1. Gross Profits and Net Business Profits include Net Gains Related to ETFs.
  2. Results are based on FY2020 management accounting rules, targets are estimates based on FY2021 management accounting rules.

Key strategies

Enhance global ALM management

We will contribute to Mizuho's overall business strategy through diversified foreign currency funding sources, including with efficient cash flow management and the use of yen asset collateral, as well as by enhancing our management methods of ALM in yen and other measures. We will also contribute through balance sheet management that accomplishes both stability and efficiency on a global basis.

Related key sustainability areas (materiality)

  • Sound economic growth 
  • Corporate governance

 

Stabilize revenue by diversifying product lines and enhancing business models that reflect client needs through further promotion of our strategy to integrate banking and securities businesses

We are strengthening our solution-based approach to meet the wide-ranging market needs of our clients through unified operations under common management across banking and securities. While reforming our foreign exchange business, we will continue to strengthen and diversify our product lines toward diversifying and stabilizing our business portfolio to further enhance our presence in the global markets.

Related key sustainability areas (materiality)

  • Sound economic growth
  • Corporate governance

 

Structural reforms for corporate foundations

In order to continue providing high quality services to our clients in the future, we are building next-generation trading rooms and market IT systems in line with technological advancements. We are also allocating our corporate resources strategically toward upgrading our infrastructure and reducing our costs in order to maintain and strengthen our competiveness. Moreover, we are improving our inhouse company-based HR management and planning functions based on reforms to our HR framework. In addition, we are also advancing sustainability initiatives in each field for investment, financing, and S&T.

Related key sustainability areas (materiality)

  • Sound economic growth 
  • Industry development & innovation
  • Corporate governance

 

Volume of Asian/emerging market foreign exchange transactions by non-Japanese companies (With FY2019 results as 100)

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Internal management accounting basis

Volume of interest rate derivatives (With FY2019 results as 100)

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Internal management accounting basis

Foreign currency funding amounts utilizing yen-denominated asset collateral (With FY2019 results as 100)

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Internal management accounting basis. Net increase amounts are accumulated from FY2019 onward.

 

Highlights

Developed and patented an early warning market management system

The early warning market management system provides visualizations of structural changes, market stage definitions, forecasted return distributions, among other items, in the financial markets based on the analysis of large volumes of market data leveraging machine learning. At the Global Markets Company we started using this system in March 2018 as a tool to support investment decisions in investment-related departments. We also acquired a patent for the system in March 2021.

Advancing futurization through a leading-edge lab created by IBM and Mizuho's Global Markets Company

The Global Markets Company launched a project together with IBM Japan and IBM Research, aiming for such goals as transforming business with leading technology. Through efforts to provide support to trader operations with technologies such as AI for the optimization of credit portfolios, and by investigating the use of quantum computing in market operations, we will work to realize the provision of valuable solutions that leverage cutting-edge technologies and data.

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