Mizuho Securities rating affirmed at A- with stable outlook

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Mizuho rating affirmed A-

Highlights

Fitch affirmed Mizuho Securities' A- long-term rating with stable outlook, citing strong operational integration and support from Mizuho Financial Group.
The subsidiary's rating directly depends on Mizuho Financial Group's long-term issuer default rating, which includes a resolution debt buffer expected at 10%-15% of risk-weighted assets.
Any downgrade or upgrade of Mizuho Securities is contingent on changes to the parent group's rating, ownership stake, or strategic importance within Mizuho Financial Group.

Group support underpins rating stance

As reported by Fitch Ratings, the affirmation reflects Mizuho Securities' position as the core securities company within Mizuho Financial Group and its close integration with the parent in operations and management.

Fitch says the long-term rating is driven by shareholder support and remains in line with the long-term issuer default rating of Mizuho Financial Group. The agency points to the subsidiary's roles across retail, investment banking and global markets, as well as oversight from the holding company in capital, funding and liquidity management.

The rating agency also says Mizuho Securities benefits from links to the group's regulatory reporting and human resources systems. In Fitch's view, there is a very high likelihood that Mizuho Financial Group would provide support if the subsidiary needs it.

Parent rating remains key trigger

Fitch says the anchor for Mizuho Securities' ratings is the long-term issuer default rating of ultimate parent Mizuho Financial Group, with expected support flowing through the group structure. The parent rating reflects, among other factors, a large resolution debt buffer that Fitch expects to remain between 10% and 15% of risk-weighted assets.

The short-term issuer default rating of F1 is mapped to the higher of the two options available for an A- long-term rating because short-term support is viewed as more likely. Fitch adds that any negative rating action on Mizuho Financial Group would result in a similar move on Mizuho Securities, while any positive action on the parent would likely lift the subsidiary as well.

A downgrade could also follow if Mizuho Financial Group's willingness or ability to support the brokerage weakens, including through ownership falling below 50%, reduced control or influence, or a decline in the subsidiary's strategic importance to the group.

Our earlier article on Fitch’s A- rating for Samsung Life Insurance’s proposed subordinated securities explained that the planned issuance was aimed at strengthening the insurer’s long-term funding structure and boosting financial flexibility. We noted that Fitch tied the rating to Samsung Life’s strong financial position, robust capitalization, and commitment to maintaining adequate liquidity to better manage market and industry risks.

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