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Mizuho Financial to cut 19,000 jobs, close 100 Japan branches

The sign outside Mizuho Bank's main branch in Tokyo's Chiyoda Ward is seen in this June 11, 2014 file photo. (Mainichi)

Japanese financial giant Mizuho Financial Group Inc. will cut around 19,000 staff over the next decade and shutter about 100 domestic branches -- some 20 percent of its total -- under a restructuring plan unveiled on Nov. 13.

The cost-saving moves announced by Mizuho Financial President and CEO Yasuhiro Sato are aimed at shifting the firm to a workable profit-generation model in an era of ultra-low interest rates and other difficult business conditions. The firm is looking to make the bulk of the staff cuts by using information technology systems to do jobs currently done by people.

Mizuho Financial also presented its interim consolidated balance sheet for the first half of fiscal 2017 on the same day, revealing a 40.5 percent drop in net core business profits compared to the same period last year, at 180.7 billion yen. Overall profit was down 11.5 percent for the term, at 316.6 billion yen, reflecting tough times in the firm's bond business and other sectors.

The Bank of Japan (BOJ)'s negative interest rate policy has continued to narrow profit margins on lending, and at the Nov. 13 news conference Sato emphasized the need for the restructuring plan, saying, "As it is currently difficult to boost yields significantly, we must better our ability to compete on cost."

Mizuho Financial Group Inc. President and CEO Yasuhiro Sato presents a business restructuring plan in Tokyo's Chuo Ward on Nov. 13, 2017. (Mainichi)

Specifically, Mizuho Financial will speed up consolidation of bricks-and-mortar branches of group firms Mizuho Bank Ltd., Mizuho Trust & Banking Co., and Mizuho Securities Co., reducing the total number of domestic branches from the current 500 or so to about 400 by the end of fiscal 2024. Branches in regional Japan in particular are slated to be merged and centralized. Meanwhile, the firm plans to open branches capable of handling highly detailed financial services such as asset management and business inheritance procedures, and add special features to spice up services indispensable for everyday life at other branches.

Regarding the staff cuts, Mizuho Financial is looking to entrust basic paperwork and other tasks to artificial intelligence systems, allowing the firm to cut some 19,000 jobs from its current workforce of about 79,000 by the end of fiscal 2026. The Mizuho Financial restructuring plan does not include offering early retirement packages, and relies instead on natural attrition through retirement and taking in lower numbers of new graduates to meet its jobs reduction target.

Meanwhile, Mizuho Financial is also considering halting the issuing of fresh home loans in local areas, instead introducing customers to cooperating regional banks. While the firm is looking to shrink its low-profitability home loan business, Mizuho Financial also plans to assist regional banks with areas they are traditionally weak in, such as asset management and assisting local firms expand overseas. Mizuho Financial hopes that these measures, which will allow it to select and concentrate on business segments it wishes to prioritize, will strengthen profitability.

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