Markets News

UPDATE 1-Mizuho raises FY profit outlook due to lower-than-expected credit costs

* H1 net profit 215.5 bln yen vs 287.7 bln yen year prior

* H1 credit-related costs at 81.2 bln yen

* Revises full-year forecast to 350 bln yen from 320 bln yen (Adds details)

TOKYO, Nov 12 (Reuters) - Mizuho Financial Group, Japan’s third-largest lender by assets, revised upward its full-year profit forecast, as the bank booked less-than expected credit-related costs for the first half-year despite the COVID-19 pandemic.

For the full year through March, Mizuho revised its profit forecast to 350 billion yen from 320 billion yen, compared with the 363.2 billion yen average estimate of 13 analysts compiled by Refinitiv.

Mizuho reported its half-year net profit fell 25% due partly to rising credit-related costs amid the pandemic. April-September profit was 215.5 billion yen ($2.05 billion) compared with 287.7 billion yen in the same period a year earlier.

While Mizuho had estimated 200 billion yen of credit-related costs for the current financial year, it booked 81.2 billion yen of the costs for the first six months through September.

Japanese banks have been struggling with ultra-low interest rates for years, and the three major lenders - Mizuho, Mitsubishi UFJ Financial Group Inc and Sumitomo Mitsui Financial Group Inc - have said credit-related costs this year would reach levels not seen since the global financial crisis.

As the outbreak has pushed companies to borrow money from banks, Mizuho’s net interest income came in at 440 billion yen for the six months, a 16.9% rise from a year earlier.

Mizuho is also open to mezzanine financing such as subordinated debt and preferred stocks, with such financing requests reaching more than 1 trillion yen so far, the chief executive of Mizuho Bank Koji Fujiwara had told Reuters.

Peers MUFG and SMFG are scheduled to announce second-quarter earnings on Friday. ($1 = 105.1700 yen) (Reporting by Takashi Umekawa; Editing by Jacqueline Wong)