Mizuho Leasing Q1 FY2027: Operating Profit Soars 39% on Lease Growth, Equity Gain

Mizuho Leasing’s Q1 FY2027 saw revenue decline to 209,946 million yen (down 4.4% YoY), yet operating profit soared 39.0% to 16,183 million yen, ordinary profit rose 57.5% to 29,087 million yen, and net profit attributable to parent shareholders climbed 52.7% to 23,255 million yen. The revenue drop mainly reflects a 24.6% slump in finance business contract execution. However, the higher-margin lease and installment business expanded, driving gross profit up 28.1% to 27,346 million yen. Ordinary profit was further boosted by a 13,459 million yen equity-method investment gain (vs. 6,933 million yen a year earlier), largely from negative goodwill of 9,633 million yen triggered by a share buyback at affiliate Mizuho Capital. Even excluding this one-off, operating profit posted a significant increase, underpinned by stronger domestic leasing and real estate earnings. EPS rose to 83.00 yen (from 54.39 yen).

Lease & Installment reported external revenue of 192,863 million yen (flat YoY) and a segment profit of 10,445 million yen (up 51.2%). Contract execution surged 96.9% to 245,251 million yen, with operating leases skyrocketing 475.5% to 137,395 million yen. Asset balances grew 1.3% to 1,988,051 million yen.

Finance posted revenue of 11,079 million yen and segment profit of 4,301 million yen (down 21.3%). Contract execution fell 24.6% to 234,335 million yen, while asset balances edged up 1.7% to 1,304,673 million yen, as rising funding costs squeezed margins.

Other businesses generated revenue of 6,003 million yen and segment profit of 704 million yen (up 260.7%), boosted by real estate-related services.

Total assets stood at 4,318,419 million yen (up 3.4% from end-FY2026), while net assets grew 2.9% to 467,876 million yen. The equity ratio improved slightly to 10.4% (vs. 10.3%). Interest-bearing debt rose 3.0% to 3,577,438 million yen, reflecting asset expansion.

Mizuho Leasing plans an annual dividend of 52 yen (interim 26 yen, year-end 26 yen) for FY2027, a 1 yen increase from the prior year.

On July 1, 2026, the company completed a private placement of A-class preferred shares to parent Mizuho Financial Group, raising approximately 46.0 billion yen. This capital injection, not reflected in Q1 figures, is expected to further strengthen the equity base and fund growth investments.

The full-year FY2027 consolidated forecast remains unchanged: operating profit 40,000 million yen (down 10.5% YoY), ordinary profit 67,000 million yen (up 3.1%), and net profit 52,000 million yen (up 9.2%).

Q1 operating profit already achieved 40.5% of the full-year target, a faster pace than usual. However, management maintains a cautious view, as the one-time negative goodwill will unwind.

• On July 28, 2026, an explosion following the Kumamoto earthquake damaged the Aeon Mall Kumamoto property held by a consolidated subsidiary. The impact on the building and rental income is still being assessed and could pressure earnings.
• Rising domestic and overseas interest rates increase funding costs, particularly squeezing the finance business.
• The rapid expansion of operating leases heightens residual value risk and sensitivity to market fluctuations, demanding sophisticated asset management.
• Currency volatility and country risk exposures (e.g., PLM Fleet, Krungthai Mizuho Leasing) require close monitoring.
• The special equity-method gain (negative goodwill) is non-recurring; sustaining profit levels requires further strengthening of core operations.

On July 1, 2026, Mizuho Leasing completed a private placement to parent Mizuho Financial Group, issuing 32,000,000 A-class preferred shares and raising approximately 46.0 billion yen. The proceeds will be deployed toward growth investments and financial reinforcement, supporting expansion in overseas markets, real estate, and environmental energy, as outlined in the mid-term plan. This move is seen as a key step to boost the equity ratio and accelerate strategic growth.