Nov. 13 (Bloomberg) -- Mizuho Financial Group Inc., Japan’s third-largest bank by market value, returned to profit in the second quarter on gains in stock holdings and lending.

The Tokyo-based company had net income of 92.3 billion yen ($1 billion) in the three months ended Sept. 30, compared with a loss of 38.4 billion yen a year earlier. The median of six estimates from analysts surveyed by Bloomberg was for profit of 69 billion yen for the three months. The bank reiterated its 200 billion yen profit forecast for the year ending March.

Chief Executive OfficerTakashi Tsukamoto is seeking to restore the company’s finances after booking the largest credit losses of any bank in Asia from investments linked to the U.S. mortgage market. The Nikkei 225 Stock Average rose 1.8 percent in the quarter ended Sept. 30 compared with a decline of 16 percent in the previous year.

Mizuho’s bad loan charges fell 38 percent to 85.8 billion yen in the three months ended Sept. 30 from 138.1 billion yen in the same period a year earlier. Net interest income gained 11 percent to 300 billion yen, from 270 billion yen.

Mizuho recorded a gain of 40 billion yen on stocks in the second quarter compared with a loss of 65.1 billion yen a year earlier.

To contact the reporters on this story: Finbarr Flynn in Tokyo at fflynn3@bloomberg.net

Last Updated: November 13, 2009 02:59 EST