As it is time, let me start the Mizuho Financial Group investor presentation for fiscal year 2021. Thank you very much for taking time out of your busy schedule today to attend the session. I am Tasaki of the IR Department, and I will be serving as the moderator. Before we begin, let me introduce the speakers who are presenting and taking questions. From your left is Mr. Kihara, President and Group CEO. Deputy President, Group CDIO and Group CFO, Mr. Umemiya. Explanation is given about the Japanese line. A disclaimer before we start the session. In today's discussion, we may state forward-looking statements based on our current expectations, which are subject to risks and uncertainties. These statements are subject to risks and uncertainties. Please be aware that actual results may differ from those discussed in the forward-looking statements.
Today, we will start with a presentation from Group CEO, Mr. Kihara, based on the presentation material titled Investor Presentation for Fiscal Year 2021 for about 30 minutes, covering financial results and strategies, followed by Q&A, during which Mr. Kihara and the Group CFO, Mr. Umemiya, will take your questions. We have about one hour for Q&A to end around 3:00 P.M. Thank you in advance for your cooperation. Mr. Kihara, the floor is yours.
Thank you very much for taking time. Allow me to make a presentation at this moment. I'd like to provide an overview of the financial results on page four. A consolidated net business profit increased to JPY 53.4 billion year on year to JPY 853.1 billion. Customer groups, all the four in-house companies revenues grew and JPY 127.9 billion was achieved, a record high. Deposits on a forward-looking basis, we provisioned credit related expenses of JPY 30.2 billion and net gains and losses on stock transactions. We canceled their funds ahead of time. There was impairment from stock holdings, so JPY 45.7 billion.
Because of special factors, including tax effects and so forth, we achieved a net income attributable to FG of JPY 530 billion, up by JPY 59.4 billion. Year-end dividend, JPY 40 per share, JPY 5 increase from the previous year. Page five. I said that we achieved a record high. Ever since we established in-house companies in FY 2016, we've seen steady progress. If you could please go on page seven. There was a business improvement plan that was implemented in order to respond to systems failure. We have shared our progress up until March, and there are three important points in order to prevent systems failures. We have checked our systems and we're capturing signs of problems ahead of time.
We also verify the functions of the system. We're trying to minimize the impact on customers when something happens. BCP, SB, we need to have a good collaboration in terms of those, and we have verified that. We have proceeded on number three. We need to focus on personnel and organization. We have to change the culture. We have also worked on a governance. Page eight. In terms of the impact on systems in the upper half, this is the cost about stable business, and in the lower half, other initiatives. We have included enough buffer to allocate a budget to strengthen the business base as is on the left-hand side.
In the middle, as you can see, if we look at the actual expenditure rate was 25%-52%, not very high for FY 2022 . As shown on the right-hand side, we're not going to have a provisional budget specifically for this, but we will make sure to allocate a budget in a methodical and flexible manner if needed in order to achieve stable operations. In terms of remedy, the impact from this is minimal. Next on page 10, fiscal year 2022 business operations. Here's the summary of what I would like to convey, financial management, business strategy, personnel, and organization. With respect to financial management, we would like to prioritize a fiscal structural reform.
We need to focus on a quality of earnings and improvement of ROE and make a steady progress and respond to uncertainties because there are uncertainties abound in the external environment. We have to take measures against that. In terms of the business strategy, in the first half of the five-year plan in the last three years, we had quite a bit of progress. By expanding the domain where we see progress, so we would like to translate this into further growth. The third point, which is about DX, we are going to create new value by utilizing SX and DX.
For all of these to be achieved, we would like to increase the job satisfaction for the employees and create a favorable cycle where our firm can grow as well as our employees. The last bullet, IT/DX, must be pursued continuously. If you could please take a look on page 12, which is about fiscal management or financial management. Depending on the category of revenues, the plan for FY 2022 and FY 2021 are compared. The blue part of the graph shows the stable revenue. For FY 2022, we're going to increase the stable revenue. We're going to invest into personnel and other initiatives, so increase the DX and other initiatives. Therefore, a JPY 24 billion reduction in stable revenue.
Upside revenues through trading and so forth, we would like to achieve the number that non-banking JPY 61 billion. For foreign bonds, we have to continue to be conservative, but on AUM, we will achieve a secure income. Not everything is going to grow linearly, so we have to be cautious. We will take flexible position to look to achieve income. For the three combined, JPY 860 billion. On the right-hand side, there's a bar graph. JPY 900 billion, which was set under the three-year plan. For areas of focus, of course, we have to once again redouble our efforts and expand the scope. We have to drive consolidated net business profit.
If you please go on to page 14. Risk-return, ROE return. You can see the comparison from 2018 to 2022. We've been putting a lot of emphasis on the quality of revenue, and we have been working on it. Each of the companies, as you can see, are seeing or demonstrating improvements year-over-year. We will insist on improving our ROE, so 7%-8%, as you see on the slide. We believe that we would need to aim for exceeding the ROE of 8%. If you could please turn to page 15. Fiscal year 2022 expenses comparison with fiscal 2021. In fiscal 2021, as you see on the left-hand side, JPY 1,421.3 billion.
On an actual basis, 1 trillion 432 billion yen was the situation. We will continue with the structural reforms to improve productivity. This is very important. Minus JPY 26 billion. We'll improve from that. This drop will be offset with the improved stable revenue and growth investment. This is an investment that we'll be making in our talent and growth areas. Investing in new areas, and a total of JPY 35 billion is planned in total. Lastly, but not least, the impact of inflation and the impact of foreign exchange, a plus of JPY 33 billion. For this fiscal year, JPY 1.5 trillion is our expense forecast for this year.
For the existing and new business areas combined, JPY 20 billion will be invested in this area. If you could see sales and trading, digital marketing, plus JPY 8 billion for this fiscal year. Next fiscal year, a same level is expected and the impact on gross profit of plus JPY 64 billion is expected. If you could please turn to page 16. Credit related costs. JPY 235 billion for fiscal 2021. There is some outstanding impact of COVID-19.
So forth. Next is page 17, where you'll find shares. Reduction of shares. In the center, where you see the bar graphs, JPY 300 billion is the target of reduction. In the three years till 2021, we have reached JPY 315.8 billion in reduction. Recycling of our risk assets is extremely critical for our business, so as you see at the top right, the three-year plan will be extended over a period of five-year business plan in order to reduce JPY 450 billion worth of cross-shareholdings over the period of five years. JPY 170 billion in reduction is our outlook from March 2022 to March 2024, as you see at the bottom right.
That concludes my earnings forecast, which we'll find on the next slide. You can see JPY 860 billion consolidated net business profits, JPY 100 billion in credit-related costs, and net gains related to stocks of JPY 20 billion, ordinary profits JPY 770 billion, and JPY 540 billion in net income attributable to FG. If you could go to the next slide, page 19, shareholder returns. Our basic capital policy and shareholder return policy remain unchanged. But maybe I caused some misunderstanding in the press conference the other day, but we have not changed our thinking towards the repurchasing of our shares. We will be taking our policies into consideration in operating our capital policy.
Our thinking towards 2022, our approach towards fiscal year 2022 is described at the bottom of the slide. It is very difficult to foresee going forward. Shanghai lockdown is still continuing, so it's very difficult to see going forward. Therefore, we do not have a dividend forecast. We will expand our gross profit and cost control will in place, so we will make sure that it is done in a disciplined manner. We've been working in that way in the past, but that approach will continue in order to enhance the possibility of achieving our targets. This concludes the earnings. Now over to business strategy.
Please go to page 21. What we have focused on for the past three years, we've seen the fruits of our efforts, and we would like to further deepen them and extend them. That is what our business strategy is about. Pages 21 and 22. These areas of synergies, areas of focus that we've been concentrating on in the last three years and our initiatives are going forward. If you could take a look at page 21 for individuals, retail, top left. Individual asset management, global equity strategy, bank and securities collaboration was pursued. We have reorganized our branch networks, separated between retail customers and corporate customers. As a result, we have equity investment trust balance of JPY 6.6 trillion.
Equity investment trust holding period, which used to be 3.9 years, is now 4.9 years. We've seen these results. Government is trying to promote additional investment. Leveraging our portfolio, we would like to improve our proposal-making capabilities and increase equity investment trust balance to JPY 10 trillion. We enhanced efforts for acquiring fund wrap accounts, and securities fund wrap balance should increase to JPY 1 trillion going forward. If you could please go to page 22. Let me explain the lower part of the page. CIB model, combining efforts between bank and securities. That's what we've been doing. As you know, in the United States, US IG DCM ranking for Mizuho is eighth.
We are making continuous efforts to improve it. Americas S&T gross profits is now 2.1 times. Moving on to the right-hand side. With our CIB business in place and products, the size of the balance sheet is quite large now. We would like to turn into asset light, and we would like to make agile use of our balance sheet. As a result, Americas profit, our profits are to be increased by 25% in FY 2023 compared to FY 2020, and USCIB fee pool to reach 1%. We would like to drive this as well. Moving on to global retail strategy, page 23.
As you know, in Vietnam, we have a MoMo app, Saia, and in the Philippines, the first digital bank in the Philippines, Tonik. With them, we have an alliance. Our strategy is to continue to financial inclusion in emerging markets in Asia, so that we can capture part of their growth. Capital light businesses is what we're investing in. And for MoMo, with Vietcombank, we have an equity at stake. Collaboration with Vietcombank for MoMo is what we envision in the future as well. Moving on to page 24, which is about DX ecosystem for Mizuho. In a nutshell, in terms of DX, we may be delayed in terms of our organizational approach. As you can see on the left-hand side, data analysis, AI technology, IT implementation, financial technology.
We do have such technology. We have quite sophisticated high levels of such technology, but we have yet to fully leverage the technologies that we have. On top right, we have external resources and alliances. Companies have DX resources, know-how, and we have alliances with them. There should be opportunities to capture and utilize them, but we have yet to do so fully. Internal and external DX-related initiatives and assets, and we need to consolidate them so that we can connect what is internal to what is external, and so that we can have an overall approach to DX. SVP Umemiya is tasked with this CDIO. Group CDIO will have a group gatekeeping function so that we can increase connection. Blue Lab.
We also have digital innovation business. At inception, we wanted to do something new and we try to adopt new concepts. We need to come back to the basics where we started so that we can have that innovation once again. From that perspective, we need to try new initiatives. As a result, we shall be able to help our customers solve their pain points and create new value as well. Moving on, page 25. I think you are already aware of this. We have alliance with Google. We made an announcement on that. As is described on the lower half of the page, the point is, as is on the left-hand side. What we receive from customer information and transaction information that Mizuho has.
By combining the two, we would like to have optimized marketing for each individual customer. Hyper-personalized marketing is what we would like to implement. Of course, investment for this is necessary. Page 26. This is about sustainability. In the area of sustainability, we have been embarking on new efforts and new initiatives. Publicly offered bonds and ESG bonds, we're number one. Sustainable finance organization. As an organization, we're number one among Japanese banks. This may have been reported. Providing finance for new renewable projects. We are providing a number of services, lease finance and so forth, to Eneos to support their low-carbon solutions.
For Tokyo Gas, this is the first deal in energy company in Japan that we have been a part of. Our strength is that we can provide finance and connect it to other areas to produce the solutions. Expertise that we have in each respective sector and technological expertise that IT has.
RT has 130 environmental consultants. Internal carbon pricing, for example, can be asset and business consulting is provided by RT. Let's move on to page 26. This is about risk management. If you could take a look at the right-hand side of the page. We have classified sectors and with regards to our clients, we are identifying the risk areas. For high risk areas, we have identified by assessing risk. The high risk exposure was JPY 1.8 trillion end of 2021. March 2022, this has changed to JPY 1.6 trillion. The next page describes our roadmap towards net zero. The section that is highlighted in blue in the center, 1.5 degrees.
We must make effort to limit the temperature rise to not two degrees, but 1.5 degrees, and also establishing a net zero transition plan. This was published the other day. COP 3 towards 2030. There is also a reduction plan. We'll be pushing forward across the industry. The next set of slides will include our ideas on personnel and organization. We're living in a time that is rapidly changing. It's very important for our employees to be able to come up with constructive ideas and creating a culture where people are able to contribute so that each and every employee have a sense of fulfillment and reward in working for the organization. At the top of this page, you will see satisfaction for work.
We will be making investment into our talent. Mid three percent wage increase has been announced. On the right-hand side, I have covered our HR system and management. The SE and RT we will make sure that we have a cross-group HR framework. The HR framework is still separate, but we're going to remove those barriers so that we can come up with a unified cross-group HR framework, so that people are able to move around in a very broad framework field where they're able to build their careers. In the middle is building an employee-friendly working environment. Improving productivity is very important by eliminating unreasonable, wasteful, and excessive quality. Also we want to enhance communication in order to improve well-being.
Fulfilling workplace and employee friendly workplace is what we would like to achieve. Next page 31. Cultural reform, I will be leading the way forward. Since the day of me assuming the position of global Group CEO, I have been adopting various measures. Approximately 620 employee opinions have been taken into account. Number two is about communication. Number three is holding a working group where our employees are taking part under three different topics. These are some initiatives that I'm embarking on in order to share the vision of Mizuho and to ensure that our vision is in line with the needs of the time, and also make sure that the purpose of the organization penetrates through the organization.
Lastly, I might be repeating myself, but before closing, I want to share with you my message. The environment is very difficult to foresee. It's very uncertain, but we will continue stable business operations while heightening sensitivity to risk. That we will proactively invest in management resources and invest into talent as well as IT and digital domain, and create a culture where our employees are able to take on new challenges that will lead to innovation and incubation. We will act as a value co-creation catalyst for a wide range of stakeholders in the age of DX and SX. We will listen attentively to our stakeholders to execute open and accountable management.
Lastly but not least, what I would say about this fiscal year, IT investment and a management policy will be implemented that would increase in expenses, but we should be able to increase our gross profit. JPY 860 billion in revenue will be achieved. At the same time, things have changed quite dramatically from the time we compiled the five-year business plan.
Approach towards ESG was completely different. Now we have many platformers and geopolitical risk is completely different, and therefore we need to look at our own business portfolio, visualize it, verify it. Think about where we should focus our management resources. That is what we and I hope to achieve throughout this year. That concludes my presentation, and thank you very much for your kind attention.
Let us move on to questions and answers, Q&A. Those of you at the venue, those who wish to ask questions, please raise your hand. We will call upon you and bring the microphone. Please state your name and affiliation before asking your questions. Next, those of you who are on the phone using your phone, please press star and one.
Once it's your turn, we will call your name as well as affiliation, and you will be unmuted. Please start your questions once you're unmuted. If you want to cancel your questions, please press star and two. We would like to limit the number of questions per person to two questions per person in the interest of time. Let us take questions. Ken Takamiya-san, please. Ken Takamiya.
Ken Takamiya from Nomura Securities. I have two questions. What is the outlook going forward and the results and the challenges for the current medium-term plan? Ever since you become president, what is it that you're seeing now that you're in the position of leadership? If you could please share that.
Under the current five-year plan, what are the results and challenges? By business line, you did explain that, but from a more group-wide perspective, overall perspective, a comprehensive perspective, what do you see as results or achievements of the five-year plan? What is it that's lacking or what are the challenges? If you could summarize the results of the five-year plan so far.
Thank you for the question. What is it that I'm seeing now that I'm in this position? What's my outlook? I've had a number of dialogues with a number of employees. There were lots of tough remarks made as well. Of course, there are a diversity of views, and I think that's important for making improvement. I think our employees are hungry for something new.
Under the five-year plan, we did generate a lot of achievements. That's fine. Last year, we hit a problem of systems failures where we're not able to embark on new initiatives. Our employees, our staff are hungry for new initiatives, new ideas. Culture and DX is something that we have to focus on. At the beginning of February, I think it was mid February, we felt what the need was in terms of DX, and so we started relevant initiatives. In terms of the results and challenges of the medium-term business plan, business-wise, there were a number of achievements, as I said. It's been translated into revenue. Last year was difficult because of the systems problems. By overcoming them, I think we will be able to gain the trust of our employees.
I think now the spirit that we can do it if we work hard. Of course, depending on the business line, there are still challenges that need to be overcome. For example, retail versus corporate. Last year we reorganized the branches. We separated into two customer segments. We're accumulating know-how for each, so improvement is seen, but there's a lot more that we can do. We need to reformulate our strategy on that front. That is one of the challenges. In terms of personnel, we have to seriously make investments into human resources development. It's not just about compensation schemes. Ease of working, diversity in the workplace, and the promotion of women.
I think there are remaining challenges that need to continue to be addressed. Thank you.
Next question, Nakamura-san from BofA Securities.
This is Nakamura speaking. On page 19, capital policies, I have two questions. My first question is about dividend. I think I believe I understand that, but growth investment and share buyback, what is the balance and what is the priority? What is your current thinking on that? If possible, what are the conditions that you want to see in order to consider a share buyback? That is my first question. My second question is within the growth investment, ORICO, your relationship with ORICO, for example, is your idea to maintain your relationship or are you thinking of any reconsolidation of the leasing companies? What is your idea? You have transferred in kind to a leasing company. If you could take those two questions.
Thank you very much. That was about share buyback and growth investment. First of all, for this fiscal year, JPY 540 billion. This I hope to achieve. At the same time, I hope to invest in growth. Do we have any funds for organic growth, I guess, is part of your question. That will be taken into account. At the end of the day, we may conduct share buyback. That will be my answer to that part of the question. ORICO and leasing companies, the relationship.
Can you please ask your question once again?
Yes, investment or interest ratio. Do you intend to maintain the current situation?
Yes, I think ordinary income of JPY 20 billion over the medium term. We want to bring that to JPY 40 billion.
Whether that is possible or not is a yardstick that we have. In the meantime, we may reconsider. You have a question about leasing. Trade companies and banking companies, we want to make use of these functionalities for us to grow. By placing that business in the center, we believe that leasing could and banking business could grow together. But I do not have an answer to your question, I guess, because we are dealing with a business partner. I think Nakamura-san was also asking about more quantitative aspects. If I could respond to you. The CET1 ratio 10.3%, as I said. We've covered this during the online conference. Provisions have been set aside, and therefore, the CET1 ratio has gone slightly down.
Our target CET1 ratio is in the first half of 9%, so there is no discrepancy. JPY 540 billion and there will be a reversal of provisions made in the past. 9% the first half or 9.7, 9.8, or going forward, if the CET1 ratio goes higher than that. When we face such a situation, is it going to be share buyback or aggressive investment? We would definitely move into a different phase where we will consider those aspects. We expect that we will move in that direction in the near future, as was mentioned by our Group CEO. We need to also think about balance. Also think about the pipeline potential of businesses that we may have. We need to be looking at the balance.
If we have no particular ideas of spending the profit, we could think of increasing the shareholder return. Thank you very much. Next question.
Mabuchi from Morgan Stanley MUFG Securities.
Thank you. I have two questions. CEO Kihara had interviews with the media. I had a chance to read them. Among what you said in the interviews, in the core business, Mizuho is not behind any other banks. When you say core business, bank securities, trust bank collaborations, related business. With changing environment, is there a possibility that your core business may change? What would be the value driver type of businesses in the sub areas? How do you delineate between the core and the sub areas? My second question has to do with digital. You have a number of strategic alliances with other companies. What are the KPIs that you have set?
What are the frameworks you're using in order to monitor progress? Not just research and investment, but for your core business, how are you going to incorporate a new technology? What kind of initiatives or efforts are you making at that? If you could please share that with us.
Thank you for the questions. First of all, yes, I did respond to media interviews, and the expression used was somewhat different.
What we view as our strengths, are they really strengths for Mizuho? We need to verify that all the time. For example, in Americas and capital markets, we do have business. That is our strength, and we can look to grow on confidence. We used to say that real estate is a strength, but is it true? Can we really maintain our strength going forward? We always have to look to areas where improvements can be made. In terms of weaknesses, can we overcome them? That's an important point. There was mention about ORICO. Credit card business, for example. Well, it's part of the core business, but profitability is not all that high. From sub to core, we have to verify whether part of the sub business can be turned into core business.
How can we improve the ORICO business, and what can we do for that? We're always looking. In terms of digital, as you can see, SoftBank Group, LINE Corporation, we have a number of alliances. As part of our plan, we look at ROE. In what year are we going to turn profitable? Whether or not we can proceed according to plan, we have to look. Second point. Returns from the business, I think it's both ways. Where we work with, say, Google, there may be a very good technology that we can capture and utilize. LINE Corporation has a 90 million user platform. LINE Credit, for example, we work with them. Their business is expanding. Using LINE Corporation technology, new customers can be developed and acquired, which is wonderful.
Within Mizuho, we're trying to push out a direct digital approach. That can be brought to what LINE is doing. I think it's both ways. It's interactive. That's the nature of our relationship with these alliance partners.
Thank you.
Do we have another question? If there are no questions from those who are physically present, Mitsubishi UFJ Morgan Stanley Securities.
Thank you very much for taking my question. Impact of system failure, fiscal 2022 and beyond, as you say. Does this mean that most of it will be seen in fiscal year 2022? How do you expect this to transition beyond 2022?
Just one question?
Yes.
Thank you very much, Nishida-san, for your question. Basically, what you see on the slide is in fiscal year 2022. In fiscal 2023, we're still verifying, there could be some impact that would emerge in fiscal 2023, but, as far as we know at this moment, there's none.
Thank you.
Thank you very much for the question. Are there any other questions? If there's no questions, SMBC Nikko, Sato-san, please.
This is Sato from SMBC Nikko Securities. I have two questions. Can you hear my voice?
Yes, I can.
Thank you. My first question with respect to foreign bonds. JPY 280 billion of valuation losses, including hedges. Right now the rate is 3%, so I think valuation losses are increasing given the current rate. Early on, large losses from foreign bonds are not necessarily going to be dealt with going forward. Given the extent of valuation losses that we've seen in the foreign bonds, do you think that these losses are manageable going forward?
Is that your answer?
That's my first question. Second is about dividend. JPY 540 billion, but since there are uncertainties, annual dividend is set at JPY 80. That's what you explained, given the uncertainties.
Do you think the uncertainties are going to continue?
Well, that's at least my take. If you're going to talk about uncertainties, you may be able to raise from JPY 80 to JPY 85. When you say you're looking to achieve JPY 540 billion, and because of uncertainties, you're going to pay JPY 80 million. Given JPY 540 billion, perhaps JPY 85 could be paid. If I may clarify that. First, regarding foreign bonds, on page 46. Can everyone see page 46? As on page 46, I can't say the specifics, but we have reduced the position considerably now that rates are up. I don't think we're going to be a major negative impact, and the current position is manageable, I think.
The second point, uncertainties. It is true that there are major changes happening in the market. Russia invaded in Ukraine, and no one could predict that. Prolonged inflation continues. Rates are up, and this is unprecedented. This could affect liquidity in the future market, and we wanted to wait and see how that evolves. About what you have pointed out is something that we should take into consideration. That's my answer.
Thank you.
JPY 540 billion. That's of course we continue to look to achieve. I'm sorry if I was rude.
Not at all. Thank you.
Next question from Takai-san from Daiwa Securities.
This is Takai from Daiwa Securities. I have two questions. My first question is the variance in profit among the three mega from this last fiscal year to this year, MUFG JPY 1 trillion level, SMFG JPY 700 billion, and JPY 500 billion for Mizuho. It seems that there is like a 70% role among the three mega. My question about this level, MUFG or SMFG, you who are ahead of you, do you plan to catch up, or do you want to stably achieve JPY 500 billion level? If your answer is to be able to catch up, that would mean that you have to expand your business. In the case of MUFG, they are expanding their business globally. It's a regional geographic expansion. SMFG, they're increasing their assets.
The directions seems to be quite different. In order to catch up in terms of budget, in terms of profit, which is the direction that you intend to expand in terms of your business outside of the traditional banking business? That is my first question. My second question is about sustainability, sustainable business or sustainable finance. There will be huge demand for sustainable finance. This is expected, but it could be patchy, like energy or power. In those areas, high-risk areas tend to have a high and strong need for sustainable finance, and I don't think this will necessarily connect to profit. How do you intend to counter such demand? Will it be a business opportunity for Mizuho? Are you planning to leverage such opportunities? Those are my two questions.
Thank you very much for your question. The audio is very poor. We will be aiming to overachieve JPY 500 billion. Instead of insisting on achieving JPY 500 billion, we want to overachieve it, exceed that, and also aim to exceed our ROE target. Extremely poor audio. In the United States, we're feeling that we're quite confident in how we're doing in the Americas. In Europe, there are challenges in the economy in Europe. Once again, I'm going back to what I mentioned earlier, what we believe that our assets is really, truly a strength for us. This is something that we need to double-check. On sustainability, I think you are right. There are about seven sectors, I think, that will require sustainable finance.
METI has come up with a roadmap. There is strong demand for finance, and I think you're exactly right on that. These sectors do require huge amount of sustainable finance. In the meantime, demand for capital will not be covered by indirect financing. We will need to bring investors from abroad to support that. I think there are a number of business opportunities. We will offer consultation services to these clients, which I think is quite critical for us. I think that would lead to us gaining more capabilities. I hope that answers your question.
Yes. Thank you very much.
Thank you. May I invite the next question?
My name is Mita from Citigroup. Two questions about expenses and global retail strategy. The first question has to do with page 15, G&A expense ratio.
Target for FY 2023 under the five-year plan was 60%, from what I remember. Toward the next fiscal year, well, you commented that you will do whatever is needed, and of course, the assumption is that top line has to grow. In terms of cost control, if you could share your comments. Next, page 23, global retail strategy. That was the phrase that you used. You have made investments into Asia, and it seems that your stage has been elevated. The necessary functions for global retail strategy, what are the functions do you think you need to pursue a global retail strategy, and what will be the areas of large investments? With respect to cost or expenses?
Well, you have just said it right.
Stable business operations and growth investment expenses will have to rise.
How can we reduce the bulk of the cost?
By having productivity enhancement, for example, personnel. We can shift personnel to growth areas, and by so doing, we can enhance productivity. The large bulky costs, can we bring that down? Where can we bring that down? Where productivity can be enhanced, those are areas that we need to focus on. By the way, in the retail area, we conducted sales reform. Retail versus corporate, the back office functions and personnel. Well, and there's the middle area between the front and the back, having contact with the customers. We're trying to shift back office people to the area that's in the middle of front and back.
There are problems with the productivity. By reassigning personnel, we would like to raise the productivity as well as the growth process. That is what we would like to do going forward. Asia's retail business. We're not looking at this as one segment. As far as Asia is concerned, Hong Kong, Singapore, we have headquarters there. We cover corporate customers, large corporates, as well as SMEs. By getting into the payment business, we can drive a business, and there are such collaborations that's possible. Technology, as I said earlier, we may be able to bring overseas technology to Japan from Asia. There's much advancement seen in Asia when it comes to global retail.
We may be able to utilize that in Japan in collaboration with the corporates in Asia. That's what we're doing.
Thank you.
Are there any other questions? Awesome. Please.
Thank you very much for taking my question. I hope you can hear me.
Yes, we can hear you.
This is kind of a related question. Page 24, 25. Ecosystem as the Mizuho Group. You have various alliances, and which you talked about, and there were questions about KPI. But looking at your ecosystem from the outside. Short-term, midterm, and long-term outcomes, what are you expecting in terms of outcome? For example, what kind of outcome do you think you could appeal to the outside in the next one year? What are the areas or partners or quantitative targets that you may have for digital marketing? Anything that could rapidly be deployed and rolled out? Any quick wins that you might be able to gain? If there are any expectations that you may have in a particular area. That's my first question. Expenses increasing this fiscal year.
In customer groups, markets, and banking, what are your expectations on top line and any upsides or downsides? If you could give some supplementary comments on that. Appreciate.
Thank you for that. I wasn't able to hear the second part of your question very clearly. My apologies.
Top line is going to be flat growth and upside to top line, how much will it be coming from? From customer groups, markets, and banking. If you could give me a breakdown. Maybe you will not be able to give specific numbers, but give me a range perhaps, your forecast or outlook for top line growth.
Okay, thank you very much for clarifying. The first part of your question, which is quite difficult, improving productivity inside Mizuho is one thing, and we want to use the digital transformation in order to improve productivity.
We're currently looking into this, what we can do, by leveraging capabilities and technologies from the outside. In terms of our relationship with the external resources, business partners that are willing to work with us, whether we are able to find such business partners is very important. Whether that is going to be directly related to reflected in our profit, maybe not so in the short term. In the next year or two, we'll be working on those aspects, so it's not going to be quick wins. Which page was it? In expense. There's a slide on expense. Is it page 15? Yes, page 15. Bottom right. Or the bar graph on the right-hand side. If you look at the bottom of it, JPY 64 billion gross profit increase. Digital marketing is included in this.
Whether that will bear fruit towards fiscal 2024 is a key. Gross profit 21 and 22 comparison. The page before that. Yes, this is the slide. I didn't go into great detail on this. Between 860 and 900, you can see increase and decrease. Based on this year's environment, these are factors where we will see increase and also decrease. In the stable revenue, overseas transactions and loans and deposits outside of Japan will have a positive impact if there are cash demands and also there could be some upside to loans and deposits outside of Japan. In the meantime, if there is a downturn in the economy, this part will drop. There could be some impact in capital markets. It's very difficult to say in value terms how much the impact will be.
Talking about some upside for this fiscal year, we're expecting somewhat of a decrease. I hope that answered your question.
Yes, indeed. Thank you.
Thank you. Any other questions, please?
Those of you on the phone, Sameshima-san.
Sameshima from SBI Securities. I have two questions. One is the corporate culture reform that you're feeling traction, that you're seeing progress, you said. Conversely, what are your challenges or difficulties in implementing the corporate culture reform? And my second question is about cross-shareholdings. Is it possible to bring it down to zero? That's the question. External directors, what are they saying, inclusive of that, what's your sense? With respect to culture. Well, we're trying to embark on new attempts, new trials, new concepts and ideas, constructive opinions from individual employees. Are we welcoming of such new views? That's the point. We have 70,000 staff members. Can everyone be turned into someone who can proactively air their views?
I think we have to point out where there are problems, and we also have to grow. Well, we still seem to stick to a top-down approach, and so we have to change that in our culture, which is difficult. Diverse human resources must be hired, and I think that's also important. We are inviting new people from the outside. By hiring those people, develop an enabling environment where people feel free to express their views. The most difficult part is whether we can change each individual employees. Cross-shareholdings, we've made substantial progress.
Page seventeen, I did not say this in the presentation, but as of end of several years ago, the number of issues, the shares we held, 13,019, it's down to 882 as of end of 2022. We have slashed that into half in terms of book price. It requires very meticulous and careful communication with the issuers. We have to continue to do that in order to reduce the balance of holdings. Of course, it's important to have a plan for that. We will continue to make an effort at that, but we need to have close communication. Without close communication, we will not be able to bring this down. Have a plan for that, and that's what we're going to do.
Thank you. Understood.
I hope that answers your question. Yes. Thank you. Thank you very much for that. Nishihara-san, in the room.
J.P. Morgan, Nishihara. Thank you for the presentation. Some people have already asked this question, but I would like to ask a question, which is that your earnings have a very conservative compared to other mega players. Guidance is very conservative, and especially the customer groups decrease in profit according to your guidance. I guess your strength has been in the customer groups, where has been growing year-over-year. Page 13, I think, describes figure for fiscal year 2023. This, I think, is a figure from the midterm business plan. On page 13, customer groups, it seems, is going to decrease from here.
A year before, you said that this is an area that is very challenging, but increase in profit guidance was offered, and you were able to achieve that. Taking that into account, why would you expect a decrease year-over-year where other mega are increasing? Also dividend and tier-one ratio. You again have a very conservative assumption. I do understand that the business environment is very uncertain, but the business environment is the same for all banking institutions. Why is that? Impact of rate increase, is that going to become very significant on your business? Is there other concerns from Russia and Ukraine? Are there any other issues that is unique to Mizuho that is different from other players leading to such a conservative guidance?
This is my question. About dividend, in the first half, will you increase to JPY 85?
If there's anything that you can share with us on that, I would certainly appreciate. Thank you very much for your questions. Which page was it? Page 13. This is the figure for 2023, this is based on the midterm plan. We have no intentions to stick to this number. This is page 14. I'm referring to page 14. My apologies. JPY 653 billion. We don't intend to stick to this, seven hundred and twenty billion. We will continue to aim for a higher level. Page 13. For fiscal 2022, stable operations of our business and the growth investment, these are things that we want to deliver on and especially the customer group business. Audio was extremely poor.
Fiscal year 2023, the fact that we have JPY 653 billion, the medium-term business plan figure here might have been misleading. Our plan is to continue to grow. That remains unchanged. About dividend, I understand there are criticisms, and I understand. I feel that the business environment is changing quite rapidly, and we have some concerns. Although I do understand where you're coming from, and I understand criticisms. JPY 540 billion is our current target, and so therefore, it could be changed. If we're able to achieve JPY 540 billion, we will change to JPY 85.
Any other questions? Takamiya-san, go ahead. Takamiya from Nomura Securities. I have one question, which is about expenses.
Other people have asked, but I would like to understand the idea behind expense management going forward. This year you are going to focus on making growth investments, investment for growth. That is going to be done while you are going to continue with the cost reduction efforts. There must be cost that you need on a continuous basis. If you are making investment for growth, the expenses are likely to increase. Is that going to have any material impact next year and onward? Well, of course, gross profits are going to go up, and perhaps expense ratio as a result may go down. Are cost control initiatives to continue? How are you going to manage expenses and how are you going to allocate them as a concept going forward? If you could share that with us.
In order to respond to structural issues, we have to spend expenses. Impairment from branch consolidation, expenses for software. We had to spend last year, but then we responded to structural issues, and that's JPY 26 billion. We will continue to enhance productivity, and we will continue to aim at that 60% expense ratio. On the other hand, investments for growth is something that requires solid discussion. While spending costs on investment for growth, we don't have to eliminate such costs. Strengthening existing businesses and creating new businesses for that by hiring people overseas, for example. I think we can do more in terms of BCM, for example. The cost and the return on cost, that is something that we need to watch closely. Overall, we would like to hit 60% expense ratio. That's the thinking.
Thank you.
You've been spending expenses in the face of increasing top line. In the latter half of 2020, your expense ratio has deteriorated, and you're aware of that, and thus working on cost reduction. We have to look at the process of cost spending closely.
Well, thank you very much. I understand your thoughts.
Thank you. Morgan Stanley. Just one question. About the revenues for markets, I tend to look at the accounting figures. Page 13, how can I reconcile these numbers? In other business related, the JPY 66.2 billion, and there is also 49 billion in other businesses. If we were not for that, it would have been 115 billion. Looking at page 13 compared to fiscal year 2023, there's an improvement by about 20 billion compared to 2021. If it were not for this, it would have been JPY 66.2 billion, but you are anticipating an upside of 20 billion or so. I was playing with numbers, and it seems that there could be a greater upside.
Accounting base, the total of these two items, it could be more than JPY 100 billion. If you could take us through these numbers once again, what is expected where in fiscal year 2021, government bonds and munis and overseas bonds, I think, was seen under Forex. What are you expecting this fiscal year? Foreign bonds, you are reducing your positions from JPY 12 trillion-JPY 9 trillion, or actually less than JPY 9 trillion, and duration is getting shorter, and you are cashing it out. In this fiscal year, you will be building new positions and seek to gain from sales of those bonds. It's kind of difficult to say where you are, but what is your policy? What is your approach? If you could elaborate a little bit, that would be extremely helpful.
This is Umemiya speaking.
Allow me to respond to your question. Market-related growth from 2020 is not significant, especially for accounting, finance. The growth doesn't seem to be very significant. That, I think, is your question. What we're showing on a management accounting basis and converting it to a financial accounting basis, we're not converting it completely. I am not able to give you a very sharp answer comparing apples to apples. If I could share with you what we're thinking, as you mentioned earlier, Tsujino-san, carry gains of foreign bonds, so we are reducing our positions. Fiscal 2021 carryover gains cannot be expected in fiscal year 2022. This is the situation. In the meantime, during fiscal year 2021, capital loss, should I say, or loss from sales have been incurred.
Will we be incurring same level of loss in fiscal year 2022? Likely not. Not need to do that. Therefore, there will be an offset between the two. Within markets, it doesn't only include banking. There's also sales and trading, which is a very volatile environment. Since the situation is very volatile and uncertain, that offers a business opportunity. Sales and trading compared to 2021, we believe that we can see some more of an upside, an increase year over year. That may not directly answer your question because we do not have a breakdown by item, but that's the image that we have, more than JPY 20 billion increase in business net profit from fiscal 2021. That is what we see.
Okay, thank you.
There are some that are coming from the customer groups.
There is an increase in customer groups, as you see on page 13. Instead of just looking at markets department, we will naturally expect an increase in accounting terms. Understood. Thank you. I think we have time for one more question. If there are no further questions, it's a lot earlier than scheduled, but we would like to conclude the meeting. Part of the slides will be additionally posted on the twentieth of May. Hanaoka-san from J.P. Morgan Asset Management, we have one other question.
Hanaoka speaking. I have a question. You think that you have to aim at over 8% ROE. Specifically, in order to achieve ROE of over 8%, what are the ideas? Do you have a specific target over 8% that you are aiming at?
Well, we do not have a specific target over 8%, but we have to at least aim at over 8%. That is the vision that we have. We do not have a specific number at this moment in terms of our.
Thank you.
Thank you. Any other questions? If not, we would like to conclude this presentation session. If there are any questions that you were not able to ask today, please feel free to contact the IR Department. I would like to ask Mr. Kihara, Group CEO, to say a few words.
Thank you very much, everyone, for taking time out of your busy schedules. Thank you very much, for all the frank and candid opinions. We would like to take them, fully. Where we need to reflect on, and learn lessons from, we will do so. At any rate, changes in society are becoming very rapid and substantial. We have put together a five-year plan. Of course, we have to achieve the numbers there. We need to once again, look at the portfolio, which areas to focus on, given the changes in the environment. We need to review that and think about that seriously. While taking, good communication, with the players of the market, the analysts, we have to be open and accountable. That's what we wish to be.
We continue to welcome your candid opinions. Thank you once again for your participation today.
Thank you very much for taking time and participating. With that, we would like to close this conference call. Thank you.