Mizuho to Scale Back U.K. Securitization Business After Losses

Mizuho to Scale Back U.K. Securitization Business After Losses

By Takahiko Hyuga

April 25 (Bloomberg) -- Mizuho Financial Group Inc., Japan's second-largest bank by revenue, will scale back its securitization business in the U.K. after losing $5.5 billion on mortgage securities.

Mizuho plans to withdraw from the business of creating securitized products at Mizuho International Plc in London and will eliminate some of the 480 positions at its securitization unit in the U.K., said Toshimitsu Okano, a Tokyo-based spokesman for Mizuho Securities Co., declining to give a number.

``We have to dismiss the team that creates securitization products,'' Okano said. ``Under these market conditions, we won't be able to continue the business.''

Mizuho will fire 100 employees at the U.K. unit, the Yomiuri newspaper reported earlier today, without saying where it obtained the information. Banks and securities firms worldwide have cut at least 48,000 jobs in the past 10 months after being hit with $290 billion of mortgage losses and writedowns.

Mizuho said earlier this month it posted a 50 percent drop in full-year profit after losing $5.5 billion on mortgage securities, the most reported by an Asian company. Net income fell to 310 billion yen ($3 billion) for the year ended March 31, below a January forecast of 480 billion yen.

Mizuho's securities unit recorded 400 billion yen of trading losses, mostly from writing down the value of investments related to U.S. subprime mortgages.