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Mizuho records Asia's biggest hit

Mizuho records Asia’s biggest hit

(18 April 2008 – Japan) Mizuho has taken the biggest sub-prime hit of any Asian bank, with losses of $A5.9 billion across the company. A spokeswoman for Mizuho Financial Group said that while the majority, Y420 ($A4.4 billion) came from the wholesale mortgage brokage unit, around $A1.5 billion came from US mortgage related problems elsewhere in the group.

While this is the first recorded Japanese bank to record write-downs in the realms of US and European banks, Mizuho remains profitable.

The bank, however, has written down their first profit forecast by 59 percent to Y310 billion ($A3.2 billion).

Despite the profitability, the securities condition could be cause for further examination of the Japanese banking market and unknown credit exposure.

The Japanese Financial Services Agency (FSA) has estimated that Japanese banks had incurred about Y600 billion of losses on a total Y1.5 trillion investment in asset backed securities, collateralised debt obligations and other US housing-related instruments, by the close of 2007.

In a statement to the Tokyo Stock Exchange, MFG said Mizuho Securities' exposure to foreign currency denominated securitisation products had been reduced in the past three months from Y470 billion to about Y100 billion. This was done from an unknown combination of sales and write-downs.
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