Mizuho plots cutbacks following disappointing results

25 April 2008

Japanese bank Mizuho is to downsize its securitisation arm, after the firm posted multi-billion write-downs.

The bank's London branch will stop creating the mortgage-backed products entirely, a spokesman has announced - a process which is anticipated to result in job cuts.

Mizuho has lost a total of $5.5 billion on the securities since the onset of the credit crunch last year.

It is understood that the majority of these write-downs were related to the now-collapsed US sub-prime market.

A full-year profits decline of 50 per cent was also registered, with net income falling to just $3 billion for 2007.

"We have to dismiss the team that creates securitization products…under these market conditions, we won't be able to continue the business," spokesman Toshimitsu Okano said.

The bank released a forecast earlier this week that predicted a rise of inflation in Japan higher than at any time for a decade, Bloomberg reports.

"We can't expect consumption and business investment [in Japan] to give much thrust to economic growth," Mizuho's chief market economist Yasunari Ueno commented.

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