The investment banking arm of Mizuho Financial Group is looking to slash costs on the continent following losses in four consecutive quarters.
Mizuho’s decision was announced in an interview with Business Times given by CEO Yoshiro Hamamoto recently.
Hamamoto said that the current situation is untenable, adding Europe was a “tough” market. He added: “We need to take steps to rightsize our expenses while at the same time working to maximise our revenue.”
Business Times wrote: “Japan’s third largest lender, a major corporate debt underwriter in the US, is struggling to make its mark in Europe following a slump in client activity in response to Russia’s invasion of Ukraine, rapid interest rate hikes and fears of a recession. To boost revenue, management is considering to build out the derivatives business in Europe, helping corporate clients hedge against risks involved in investment-banking transactions.”
It added: “The broker joins Japanese rivals that are seeking to turnaround their European investment banks amid a slump in bond and stock issuance. Nomura Holdings is working to diversify its European business after five consecutive quarters of losses, while Daiwa Securities Group said last year it will move part of its back-office operations in London to Japan.”
While Mizuho is looking to draw back in Europe, the firm has its sights set on elsewhere. An interview with the Japan Times earlier this week saw Hamamoto say that the firm’s brokerage arm was looking to grow more in the US. The paper wrote that its US business, which is mainly investment banking and trading, accounts for roughly a third of the Japanese brokerage’s profit.
Not that everything is going well at home. Japan’s The Asahi Shimbun says that for the first time ever, Mizuho Bank was charged negative interest rates on deposits made to its Bank of Japan account–something expected to cost the megabank JPY 75m ($560,000). The negative rates were applied to deposits made to its account there from July to August, according to BOJ statistics released this week.