Change&Speed-Up Program
25 11월 2002 - 9:42PM
UK Regulatory
RNS Number:2090E
Mizuho Holdings Inc
25 November 2002
Corporate name: Mizuho Holdings, Inc.
Representative: Terunobu Maeda
Head office: 6-1, Marunouchi 1-chome
Chiyoda-ku, Tokyo, Japan
OUTLINE OF THE "CHANGE & SPEED-UP PROGRAM"
On April 1, 2002, through the corporate split and merger process, the Mizuho
Financial Group (MHFG) adopted a new business model and launched legally
separate subsidiaries based on customer segments and business lines. While we
are striving to further strengthen the earning capabilities in accordance with
the objectives of "Program for Financial Revival" issued by the Financial
Services Agency on October 30, 2002, we have formulated and will execute the
"Change & Speed-Up Program" to accelerate the efforts to achieve our goal of
being an innovative financial services group that will lead the new era through
offering cutting-edge, comprehensive financial services.
Framework of the "Change & Speed-Up Program"
1. Change and accelerate the deployment of business strategies
2. Accelerate cost structure reforms
3. Strengthen corporate governance and reinforce a merit-based remuneration
system
By everyone in the Mizuho organization from senior executives to each and every
employee working hardest to execute the Program, we aim to improve our
competitive edge and enhance the corporate value of the MHFG.
Please direct any inquiries to:
Mizuho Holdings, Inc.
Public Relations: 81-3-5224-2026
1. Change and accelerate the deployment of business strategies
Based on a clear vision of the future, Mizuho Corporate Bank, Ltd. (MHCB),
Mizuho Bank, Ltd, (MHBK), and other group companies will further enhance their
expertise to properly respond to customer and business needs, and accelerate the
business strategies by making maximum use of the group's enormous customer base
and each company's core strengths.
(1) Mizuho Corporate Bank
"The overwhelming market leader in market-oriented indirect financing"
* We will breakaway from the conventional business model that is dependant on
volume of assets, and carry out a significant reallocation of management
resources, as well as wide-ranging organizational reforms by the end of
December 2002, so as to swiftly realize a market-oriented indirect financing
model with the syndication business at its core.
* Target: Ratio of non-interest income to total gross profit = 50%
a) Expansion of the syndication business
* Expand the arranger business to bridge between borrowers and investors in
the market.
-- establishment of the Syndication Business Unit with a staff of 200 (to
be carried out in December)
-- expansion of cross border transactions working together with the group's
overseas offices
* Increase the efficient use of assets through securitization and
strengthening portfolio management.
* Reform both the asset structure and the funding structure resulting from
squeezing the balance of bank debenture issuances.
* Increase in earnings from fee commissions.
b) Strengthening of the solution business
* Significantly strengthen the products marketing and processing business.
-- reorganization and expansion of the Financial Products Business Unit and
the Financial Services Unit; an increase by 230 staff (to be carried
out in December)
-- expansion of fee businesses such as structured finance, defined
contribution pensions, trade finance and clearing/settlement
* Strengthen industry research capabilities.
-- enhancement of strategic advisory functions to customers through its
corporate research capabilities
* Pursue the corporate turnaround business.
-- establishment of the Corporate Restructuring Business Unit, six
divisions staffed by 150 (carried out in October)
-- providing services for corporate reorganization conducted by specialists
c) Strategic restructuring of the international business
* Strengthen businesses with the 10 thousand Japanese corporate customers in
overseas market.
* Especially strengthen support to Japanese corporations expanding their
operations into China.
-- establishment of the China Business Promotion Division (carried out in
July)
-- setting up business alliance with China's four major commercial banks
in RMB business (carried out in October)
* Review business with non-Japanese customers, and restructure overseas
network.
-- JPY 3 trillion risk assets reduction related to non-Japanese customers
(to be carried out during the current fiscal year)
-- further reduction in number of overseas offices
d) Aggressive reallocation of management resources to strategic business areas
(to be carried out in December)
* Eliminate planning divisions of all groups and business units.
* Drastically reduce the corporate and administrative staff and reallocate
human resources in strategic business areas.
-- syndication and solution business areas: +580 employees (redoubling from
current status)
-- planning and administration areas, etc.: -1,100 employees
(2) Mizuho Bank
"Aiming to be the customer's bank of choice and best business partner by
achieving the highest level of customer satisfaction through providing high
value-added comprehensive financial services."
* While MHBK enjoys its predominant position supported by both its nation-wide
network and enormous customer base, it will carry out drastic cost
reductions ahead of schedule in order to establish its competitive edge in
terms of cost, speed and service quality, and accelerate strategic
deployment according to customer segmentation.
* Target: Expense ratio= 40% range
a) Cost reduction ahead of schedule
* Realize cost competitiveness by branch consolidation and staff reduction
well ahead of schedule.
-- consolidation of 120 branches during the next year and a half (network
of 440 branches by the end of March 2004)
-- reduction in employees (4,000) one year ahead of schedule
b) Strategic deployment according to customer segmentation
* Expand "Prime" customers, who utilize MHBK as their primary financial
institution, through marketing based on customer segmentation.
-- expansion of "Mizuho Value Program," a membership-style banking service,
from the present 6.8 million members to 10 million by the end of March
2005
-- growth in the volume of home mortgage loans with more variety in the
product line and the quicker approval process
* Provide stable services to meet the customers' funding needs and offer high
value-added services.
-- staff of 500 exclusive for exploration of new customers
-- increase of specialists by 100 in the area of solution businesses
-- support for the customers' business restructuring by the Corporate
Consulting Department
* Establish low cost and high quality operations for small business loans
with quick responses to customers' funding needs.
-- expansion of direct marketing by the Business Finance Center (100 expert
staff placed)
-- product enhancement of the "Business Partner" (unsecured loan product
utilizing automatic credit scoring model)
* Secure appropriate loan spreads which reflect credit risks.
* Secure appropriate level of fees and commissions which reflect operating
costs.
(3) Strategy for securities and trust banking businesses
Mizuho Securities Co., Ltd. (MHSC), Mizuho Trust and Banking Co., Ltd. (MHTB)
and other securities and trust banking arms of MHFG will further strengthen
their capabilities in their respective strategic business areas, and actively
pursue the synergies with other group companies.
a) Group's securities business strategy
* Strengthen the equity-related business and secure profitability.
-- joint marketing for underwriting business among group securities
companies (in addition to Mizuho Investors Securities Co., Ltd. (MHIS),
MHSC will establish a joint marketing relationship with Shinko
Securities Co., Ltd.)
-- increasing human resources in MHSC's equity business (40 professionals
such as analysts)
* Strengthen cooperation in the area of business with individual customers.
-- aggressive promotion of setting up one-stop shopping branches by MHBK
and MHIS where their operations are placed under one roof (increase the
number of one-stop shopping branches from the current 12 locations to
100)
b) Group's trust banking business strategy
* Increase in number of branches licensed under franchise system in trust
services (MHTB + MHBK, MHCB).
-- increase in the number of such branches from the current 291 by 100
* Fortify group business promotion activities in the testamentary trust and
real estate businesses.
-- promotion of setting up one-stop shopping branches by MHBK and Mizuho
Asset Trust & Banking Co., Ltd. (MHAT) (50% of MHAT's branches are now
in such a format)
2. Accelerate cost structure reforms
While aggressively pursuing the consolidation effects, MHFG will accelerate its
efforts to cut operating costs by carrying out such drastic restructuring plans
as reviewing the salaries of all executives and employees.
* Fiscal 2005 expense target: JPY 730 billion
(JPY 170 billion (20%) reduction as compared with the budget for fiscal 2002)
a) Additional decrease in the number of board members and executive officers,
and 30% cut in yearly compensation.
b) Number of employees: reduction of 6,300 employees
* 24,000 employees as of March 2005 (11,000 (30%) reduction as compared with
March 1999)
c) Salaries: general managers -20%, average -10% cut in annual compensation
* Decrease the base salary and bonus of employees, subject to negotiations
with the employees' union.
* Reinforce compensation systems based on the employee's performance.
-- wider deviation in performance evaluations in bonus, promotions, and so
on
-- acceleration of conversion to "professional staff" job classification
(annual salary system linked to performance and expertise)
d) Number of domestic branches: reduction of 120
Number of overseas offices: reduction of 13
* Domestic - 460 branches as of March 2004
(185 (30%) reduction compared with March 1999)
* Overseas - 43 offices as of March 2004
(70 (60%) reduction compared with March 1999)
3. Strengthen corporate governance and reinforce a merit-based remuneration
system
We aim to aggressively strengthen corporate governance, focus on more speedy
managerial decision making and reinforce a merit-based remuneration system. Our
employees with unique talent and multi-faceted expertise endeavor to create a
professional group with a challenging spirit to achieve their objectives of
providing the best solution to customers, resulting in encouraging its
cohesiveness and creating an energetic organization.
a) Strengthen corporate governance
* Achieve a management structure that is slim and speedy.
-- one CEO structure
-- reduction in number of board members and executive officers by 20% (30%
reduction as compared with March 2002)
* Secure transparency in management and clear accountability.
-- increase in the number of outside directors
-- establishment of an advisory board (in July)
b) Development and advancement of young employees
* Place younger employees as branch general managers (GMs).
-- introduction of the job application system for branch GM positions from
employees (implementation in January 2003)
-- employees in their 30s will be subject, to be placed in 50 branches
(10% of all domestic branches)
* Dynamic rejuvenation in the organization.
-- introduction of a "New Career Path Development Program" (early
retirement plan) (January to March 2003: 500 employees)
c) The right person in the right job
* Expand the Job application system.
* Assure placement of the right person in the right job through large-scale
personnel transfers.
d) Realization of fair performance evaluations
* Expand the 360-degree evaluation for all managers (5,000 employees) (during
this fiscal year).
* Enforce "Mizuho evaluation standard," a uniform personnel evaluation system
throughout the group companies.
e) Enhancing common consciousness as a member of the Mizuho Financial Group
* Establish the "Mizuho Group Award" (during second half of fiscal 2002)
Attachment (2)
Group Companies of MHFG
Mizuho Bank Mizuho Corporate Bank Mizuho Securities Mizuho Trust & Banking
Large corporations Wholesale securities company Trust banking services for
Primary Financial institutions with primary customers of: corporate customers such as
Customers Overseas corporations Institutional investors Institutional investors
And (including subs. of (domestic and overseas) (domestic and overseas)
Businesses Individuals Japanese companies) Corporations Corporations
Domestic companies Public sector Financial institutions Financial institutions
Local governments entities Public sector entities Public sector entities
President & CEO President & CEO President & CEO
Management Tadashi Kudo Hiroshi Saito President Yoshio Osawa Hiromichi Tsuda
7 Board members 7 Board members 7 Board members 6 Board members
Capital JPY470 bil. Capital JPY710 bil.
Business Assets JPY71 tri. Assets JPY65 tri. Capital JPY150 bil.
Volume Deposits JPY53 tri. Deposits JPY22 tri. Assets under management Capital JPY115 bil.
Loans JPY40 tri. Loans JPY32 tri. JPY4 tri. Trust assets JPY31 tri.
23,785 employees 5,686 employees 1,366 employees
Employees 560 domestic branches 18 domestic branches 1,117 employees 9 domestic branches
And 115 representative 56 overseas offices 6 overseas offices 2 overseas offices
Network offices, etc. (including (including (including
5,400 ATMs (approx.) subsidiaries subsidiaries) subsidiaries)
(Note) All the figures as of September 30, 2002.
Mizuho Investors Securities Shinko Securities Mizuho Asset Trust & Banking
Primary
Customers Middle and retail market Trust bank primarily offering asset
And securities company primarily Second-tier comprehensive management services to individuals
Businesses dealing with MHFG customers securities company and corporate customers
President Taira Hosaka President Takeshi Kusakabe President & CEO Hiroaki Eto
Management 5 Board members 10 Board members 5 Board members
Capital JPY80 bil. Capital JPY125 bil. Capital JPY247 bil.
Business Assets under management Assets under management Assets JPY6 tri.
Volume JPY4 tri. JPY8 tri. Trust assets JPY5 tri.
Employees
And 1,918 employees 4,909 employees 1,956 employees
Network 60 domestic branches 96 domestic branches 39 domestic branches
(Note) All the figures as of September 30, 2002.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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