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Mizuho lowers profit forecast, cites US credit troubles

Mizuho lowers profit forecast, cites US credit troubles

Mizuho Financial Group Inc., Japan's second biggest bank, lowered its fiscal 2007 earnings forecast Friday, blaming growing damage from the U.S. credit crisis.
In its third revision for the fiscal year ended March 31, Mizuho said it now expects a profit of 310 billion yen (US$3 billion; euro1.9 billion). It had previously projected profit of 480 billion yen (US$4.7 billion; euro3 billion) for the year.
Spokeswoman Masako Shiono said that subprime-related losses at Mizuho for the fiscal year are expected to total about 560 billion yen (US$5.5 billion; euro3.5 billion) with the latest revisions.
Mizuho is planning to report earnings in the middle of May, but a date has not yet been set, Shiono said.
NHK TV news reported Friday that the subprime-linked losses at Mizuho appears to be the biggest among Japanese lenders. Compared to U.S. financial groups, the exposure of Japanese banks to the U.S. subprime mortgage problem is expected to be small.
Fears are growing about the possible negative impact on Japan from a U.S. slowdown. Earlier this week, the International Monetary Fund said the U.S. is headed for a recession and dragging world economic growth down along with it.
The IMF has estimated that more than US$1 trillion in losses will be linked to the collapse of mortgage-backed securities.
Billionaire financier George Soros said Thursday that he agreed with that estimate and warned that the crisis is far from over. The reported losses so far don't reflect the full scope of the damage, he said.
Mizuho said in a statement that the biggest damage to its group from the U.S. credit problems was at money-losing Mizuho Securities Co.
The news, which had already been expected in the market, did little to hurt Mizuho shares. Mizuho stock inched up 0.8 percent in Tokyo morning trading to 390,000 yen (US$3,800; euro2,400).


Updated : 2021-10-17 15:09 GMT+08:00