January 31, 2020 / 7:40 AM / 23 days ago

UPDATE 1-Japan's Mizuho Q3 net profit surges as market recovers

* Q3 net profit Y116.3 bln vs Y50.6 bln year earlier

* Net interest income falls 5% year on year (Adds further earnings breakdown, context)

TOKYO, Jan 31 (Reuters) - Mizuho Financial Group Inc , Japan’s third-largest lender by assets, on Friday said net profit in the third quarter more than doubled from a year earlier, due primarily to a recovery in market conditions.

Mizuho posted profit of 116.3 billion yen ($1.06 billion) for October-December versus 50.6 billion yen in the same period a year earlier, showed Reuters’ calculations based on nine-month cumulative figures disclosed in a stock exchange filing.

Mizuho kept its profit view for the full-year through March at 470 billion yen, which compared with the 485.4 billion yen average of 11 analyst estimates compiled by Refinitiv.

The lender’s trading division posted 115.3 billion yen net profit in the nine months through December, up about 41% year on year.

The bank’s lending business remained tepid, with its loan-to-deposit rate margin - or difference between interest earned on loans and paid on deposits - falling to 0.76% from 0.8% a year earlier.

Its net interest income fell to 554.9 billion yen in the nine months, down 5% from a year earlier.

As widely expected, the Bank of Japan (BOJ) last week kept its monetary policy steady, maintaining its short-term interest rate target at -0.1% and a pledge to guide 10-year government bond yields around 0%.

At the World Economic Forum annual meeting in Davos late last week, BOJ Governor Haruhiko Kuroda said keeping interest rates too low for too long could have negative effects on the country’s banking system. Nevertheless, he stressed the central bank’s resolve to maintain its massive stimulus programme. ($1 = 109.7000 yen)

Reporting by Takashi Umekawa; Editing by Christian Schmollinger and Christopher Cushing

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