Mizuho plans more dealmaking to become top Asia investment bank

[TOKYO] Mizuho Financial Group is aiming to become Asia’s top investment bank by bolstering equity underwriting and M&A advisory, seeking to replicate the headways the firm has made in the US.

Japan’s third-largest financial group plans to deepen ties between its banking and securities units in Asia and Europe in order to boost revenues, Yutaka Nanjo, head of global investment banking at Mizuho Securities, said. In the US, Mizuho wants to further leapfrog rivals to rank regularly in the top 10 for investment banking, Nanjo said.

“In the US, we built our own platform ahead of competitors and are leading Japanese securities firms,” said Nanjo, who sees UBS Group and BNP Paribas as competitors. “We must strengthen Europe and Asia, which are outside our core strength in the Americas.”

Mizuho and its domestic rivals have long sought expansion overseas, undertaking acquisitions to drive growth. With deals in Japan now also reviving under a slew of corporate governance changes, banks are busy trying to find talent to pounce on the opportunities.

In the US, Mizuho bought a portfolio of North American loans from the Royal Bank of Scotland Group in 2015 to build its client base. More recently in 2023, the firm acquired US boutique advisory firm Greenhill & Co to forge deeper into investment banking.

Mizuho ranks 14th in the US for fee income from debt and equity capital markets as well as M&A advisory, for the fiscal year ended March, according to its investor relations presentation.

While this trails Wall Street giants such as JPMorgan Chase, it is far ahead of Mitsubishi UFJ Financial Group’s 20th position, Sumitomo Mitsui Financial Group’s 29th place and Nomura Holdings’ 41st ranking, the presentation shows. The US business is profitable and a “major pillar” within investment banking, Nanjo said.  

In Europe, Mizuho is ranked 27th, while in the Asia Pacific, the firm is number three behind first-placed Nomura, according to the presentation.

To reach its ambition to be the top dealmaker in Asia within the next decade, Mizuho plans to intensify efforts to groom bankers who can do both commercial and investment banking, Nanjo said. It will also hire talent from outside the firm, he said, declining to elaborate on numbers. Its current Asia-Pacific head of banking Joris Dierckx is a BNP Paribas veteran who joined last October.

Nanjo also said that the firm is open to having a role in hostile corporate takeovers in Japan, where the taboo of being a financial adviser in these situations still lingers despite such M&As becoming more common.

“It’s not a simple decision,” Nanjo said, adding the firm will discuss whether the takeover contributes to improving corporate value or strengthening Japan’s competitiveness. “If there is a just cause, we will accept it. We want to handle each case carefully.” BLOOMBERG