(Dec 24): Mizuho Financial Group Inc’s efforts to expand its global mergers and acquisitions (M&A) advisory business will likely get a boost from the incoming Donald Trump administration’s policies.

Masahiro Kihara, the chief executive officer of Mizuho, Japan’s third-largest lender, is expecting president-elect Trump to make regulations more business friendly. This could aid the firm, which is seeking a bigger dealmaking presence in US financial markets and acquired boutique investment bank Greenhill & Co last year.

“I think there are many positives for the US such as a pickup in M&As” as a result of Trump’s return, Kihara said in an interview. For foreign firms, though, “given ‘Make America Great Again,’ I don’t know yet how the acquisition of US companies by the Japanese will be viewed,” he said.

Japanese banks are chasing more business abroad as a shrinking population at home limits the growth outlook, and the global M&A market is one key target. The volume of deals this year has risen about 15% to reach US$3.3 trillion (RM14.81 trillion) worldwide after two years of declines, according to data compiled by Bloomberg. Mizuho’s acquisition of Greenhill, which valued it at US$550 million including debt, aims to speed up expansion in Americas by delivering the Japanese bank more than 80 M&A managing directors.

Mizuho expects to win more mandates advising cross-border deals by leveraging the client networks of Greenhill and Mizuho beyond the US, said Kihara, who has spent his entire career since 1989 in what’s become Mizuho after a merger of banks.  

The CEO, who studied mid-career at Duke University School of Law, said he sees “many opportunities” for cross-border transactions, such as those between the US and Asia as well as the US and Australia.

For itself, Mizuho is focusing on a smooth integration with Greenhill, before considering any further acquisitions in the US, Kihara said. But it’s open to opportunities in asset management companies like Golub Capital, he said. Mizuho bought a minority stake in the US private credit manager earlier this year. 

The Greenhill deal will help Mizuho compete with top M&A firms like Goldman Sachs Group Inc, JPMorgan Chase & Co and Morgan Stanley, the head of the Japanese bank’s US securities unit said last year after the transaction was announced.

League table data on global M&A advisers indicate that Mizuho and Greenhill have a long way to go. Mizuho was No 33 in the world this year, falling from No 15 in 2023, while Greenhill dropped to No 77 from No 65 during the same period, according to data compiled by Bloomberg. 

In Asia, Mizuho will keep building up its transaction banking operations, providing services managing daily cash flow and payment and billing needs by corporate clients, Kihara said. With capital markets still small in many parts of Asia, a business area like that is one growth driver, he said.

While Mizuho isn’t interested in any specific big-ticket acquisitions in the region including local commercial banks now, the lender has more money to spend on growth investment. “So far we put priority on building up capital, but we have enough now,” he said.

Bloomberg has reported Mizuho is among the leading bidders for Avendus Capital Pvt, one of India’s biggest investment banks. Kihara declined to comment on that. 

In Japan, Kihara said he isn’t seeing much negative impact on borrowers from higher interest rates, as the central bank’s policy normalisation is taking place as a result of the better economic health.

The chairman of the Japanese Bankers Association, Akihiro Fukutome, said last week that for the Bank of Japan (BOJ) to lift interest rates more regularly, there needs to be a clearer rising trend in consumer prices. Fukutome, who is also the CEO of Sumitomo Mitsui Banking Corp, spoke after the BOJ kept policy unchanged earlier this month and its governor suggested it may wait longer to hike rates.    

“The broader macro picture is that interest rate rises have been accompanying an increase in corporate earnings,” said Mizuho’s Kihara, who in university days belonged to the same ice hockey club as Fukutome, according to the banks’ disclosures.

Still, the Mizuho CEO said smaller companies might suffer down the road as higher wages and a cheaper yen push up costs. “We have to closely monitor that and will provide consultations,” Kihara said. 

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