INVESTMENT BANKING | Staff Reporter, Japan

Mizuho to expand overseas lending by 30%

Mizuho Financial Group Inc has increased loans overseas by 25% from a year earlier in March and now looks to expand lending by another 30%.

Mizuho, Japan’s third-largest lender by market value, intends to target Asian companies unable to borrow from European banks that are retrenching amid the Eurozone debt crisis. The banking group expects 30% of operating profit to come from abroad within three years and may consider acquiring a financial institution.

Nobuhide Hayashi, a managing executive officer at Mizuho’s corporate banking unit, said Mizuho’s planned acquisition of the Brazilian unit of German bank WestLB AG’s will enhance Mizuho’s ability to lend abroad.

Mizuho increased loans overseas by 25% from a year earlier to US$127.8 billion as of March 31. Some 20% of its operating profit came from abroad last fiscal year and it expects to boost that figure to 23% this year.

Mizuho is targeting higher-yielding markets as European banks sell assets, making up for declining profitability on loans in Japan. Lending in Japan rose 0.8% in June from a year earlier and has failed to increase more than 1% since October 2009.

The average interest rate Japanese banks charge for new loans fell to 0.95% in May, close to a record low of 0.92% in February.

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