Wall Street Slump Isn't Deterring Mizuho From Overseas Push

Mizuho Securities Said to Add 60 Staff in Americas
  • Japanese firm expects to make profit abroad this fiscal year
  • Adding about 60 people in the Americas, according to CEO Sakai

The trading slump that drove Nomura Holdings Inc. to pare its overseas workforce isn’t deterring Japanese competitor Mizuho Securities Co.

The brokerage unit of Mizuho Financial Group Inc. expects to remain profitable abroad this fiscal year, even after a quarter that saw most Wall Street banks report steep earnings declines, Chief Executive Officer Tatsufumi Sakai said in an interview in Tokyo. The firm is adding 50 to 60 bankers and back-office staff in the Americas in the coming year, a roughly 10 percent headcount increase, according to Sakai.

Tatsufumi Sakai
Tatsufumi Sakai
Photographer: Akio Kon/Bloomberg

“Our overseas operations are currently profitable and we’ve been boosting revenue abroad very smoothly compared with other Japanese banks,” Sakai, 56, said last week. “Mizuho will boost profitability.”

Adding Staff

The Japanese firm has already been adding staff at home and abroad, unfazed by the financial-market turbulence and stricter regulations that are prompting global banks from Credit Suisse Group AG to Goldman Sachs Group Inc. to cut costs.

Sakai said Mizuho is strengthening its coverage of the food and beverage and pharmaceutical industries to originate cross-border acquisitions and financing deals. “We will pay the necessary costs to hire excellent professionals because investment banking requires special talent,” he said.

Sakai declined to comment on earnings for the final quarter of the year ended March, citing the quiet period before reporting results. The unit of Japan’s third-biggest lender by market value posted profit of 6.6 billion yen ($59 million) overseas for the nine months ended Dec. 31. By comparison Nomura, Japan’s largest brokerage, lost 63 billion yen abroad before taxes for the period, while Daiwa Securities Group Inc., the second biggest, posted 4 billion yen of losses.

Equities Expansion

Mizuho Securities, which employs 1,300 people abroad, strengthened its equity business by hiring 45 analysts, salesmen and traders in Tokyo, Hong Kong, New York and San Francisco since September, mainly for Japan stocks. Earlier this year it formed an alliance on European equities with Redburn Europe Ltd., a U.K. research and trading house.

Sakai hopes the buildup of the research and sales force will help the firm boost investment-banking business, including equity underwriting and mergers advice. Mizuho was ranked fourth among managers of Japanese stock sales last year and seventh among M&A advisers, according to data compiled by Bloomberg.

In Europe, the firm is seeking to strengthen coverage of financial institutions, where “the wallet share is large,” Sakai said. The brokerage will replace some staff in the region to improve the business, he added. 

Mizuho isn’t the only Japanese firm that’s expanding in investment banking in the U.S. Sumitomo Mitsui Financial Group Inc.’s brokerage unit plans to hire senior bankers in the Americas to build a new team that will originate deals in the region, Executive Managing Director Taneki Ono said this month.

Meanwhile, Nomura is largely exiting European equity operations, a move that combined with reductions in North America could affect about 1,000 jobs, people with knowledge of the matter said earlier this month. 

Sakai joined Industrial Bank of Japan Ltd., a predecessor of Mizuho, after graduating from the University of Tokyo in 1984. As a head of mergers and acquisitions at Mizuho, he advised on about 100 deals from 2002 to 2007. Among the transactions his firm worked on was SoftBank Group Corp.’s $17.5 billion acquisition of Vodafone Group Plc’s Japanese mobile-phone unit in 2006.

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