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Mizuho Q2 profit falls 12% on weak lending business

Reuters TOKYO (Reuters) — Mizuho Financial Group posted on Monday a 12 percent drop in quarterly profit, as ultra-low interest rates hurt income at its core banking business.

Net profit at Japan’s third-largest lender by assets came in at ¥198.4 billion ($1.75 billion) for the July-September period, down from ¥225.5 billion a year earlier, a Reuters calculation based on the bank’s six-month results shows.

Mizuho and other Japanese banks have been hit by diminishing returns from lending under the Bank of Japan’s massive monetary easing, which has pushed down interest rates on mortgages, car loans and corporate borrowings.

Mizuho’s net interest income, or profits from lending and bond coupons, fell to ¥407.4 billion for the first six months, from ¥436.4 billion a year earlier.

But a bright spot for Mizuho, like other Japanese banks, was bad loan costs that narrowed, with a gradual improvement in the country’s economy improving borrowers’ credit-worthiness.Speech

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