The secret word is "Do not return to the front of the corona" Mizuho top preparedness June 12 19:00
The new coronavirus has been hit by a sharp drop in sales that companies and sole proprietors all over Japan have never experienced. Financial institutions are now being challenged for their roles in order to keep tight cash flow. How will the top of Japan's leading megabanks face the corona shock, which is said to be the economic crisis once every 100 years? Interview with Tatsufumi Sakai, President of Mizuho Financial Group. (Daisuke Nogami, Reporter, Ministry of Economic Affairs)
Consultation rushing to 17 trillion yen
From large companies to shops in town, Corona Shock hit the management of various companies.
Q What is happening at the bank's loan site?
President Sakai
"There are some differences in domestic, overseas, large companies and small and medium-sized companies, but the number of applications in Japan has increased rapidly in April. The consultation including the loan line is 17 trillion yen. Loans are being made. Since large companies have thickened their funds to prepare for it, new loan applications are gradually slowing down. It's continuing at a pace. It's a lot of energy here."
Mizuho Financial Group is one of the three major financial groups with Mizuho Bank, a megabank. The loan balance (as of March 31, 2020) is ¥83 trillion.
After the spread of the new coronavirus, the related loan request was 17 trillion yen. In the past few months, consultations on loans of a size equivalent to 20% of the loan balance have swept over at once.
There are companies that want to have money considering the future, but how many companies have had a sharp decrease in income and have become difficult to deal with? You can see from this number.
Next to lending
President Sakai has been in the financial world for 35 years. Based on the former Bank of Japan Industrial Bank, I was assigned to sales, planning and New York. Bubble burst, Asian currency crisis, IT bubble burst, and Lehman shock. As a financial man, I experienced many economic shocks.
Q. From your experience of several crises, what do you think the next thing banks will be required to do in response to the corona shock?
President Sakai: At present
, the sudden loss of demand is at the center of the problem, so it is necessary to take measures to support liquidity (by lending). Unfortunately, however, the "financial soundness" of companies has become a problem over time. The focus will shift to how to accumulate capital power. We will consider how we can support the increase in capital."
Loans will cover the working capital needed for immediate payments, but will have to be repaid eventually. In some cases, the repayment may become difficult and the business may not stand up.
For the time being, we will connect working capital with a loan, then for the time being, we will issue funds with a "subordinated loan" that only requires interest payment, or invest in a special stock called "preferred stock" To strengthen.
President Sakai intends to proactively provide in-depth support.
After-corona that supports change
In Japan, the emergency declaration was lifted and economic activity was resumed. This is the “after corona” phase.
Q: The bank's core business is to provide the money necessary for daily living and corporate activities to support it. What is the job that the bank should do for after-corona?
President Sakai
: It's no longer enough to be patient and still return to the corona. Digitalization has advanced and anxiety about old age has become more prominent. In the industrial structure, the global supply chain (parts It is necessary to rebuild the bias of the supply network. Since various industries move, we will support it while discussing. Not only providing money, but also being a wall striker I want to work together like this"
No matter how much money you give, if the business of the company does not go well, the money you lent will not be returned. Both companies and banks have collapsed.
After-corona is a big change in many industries. Banks that can not only get advice on money but also think about businesses that have changed and plans to survive the changes together with their business partners and give wisdom together will survive. That's what President Sakai sees.
Banks change with corona
What do you think of the banking industry? If you are a sales representative of a branch, you can go to work early in the morning, visit many customers' places, respond to customer consultations on your mobile phone on the way, return to the branch for meetings, and prepare documents.
But the new coronavirus is changing the way these bankers work. In-house regular meetings are generally online to prevent the spread of infection. It is said that the number of online interviews with business partners has increased.
What Mizuho is trying to do at once is the digitization of contracts. When a company signed a loan contract, it was necessary to create a contract, paste a revenue stamp on it, press a stamp, and bring the completed document to the bank.
President Sakai says that he wants to shift from the paper/hanko culture to computerization. Electronic signatures replace electronic stamps in contracts. It is OK with a personal computer.
Businesses can avoid the hassle of going to and from banks. For bank staff, it is possible to change the way of working and improve efficiency because the loan contract procedure can be done by telework.
President Sakai plans to digitize 50% of all transactions within 2020.
President Sakai:
“We use the slogan of “do not return to the front of the corona.” It has been quite difficult until now, but I realize that computerization is so convenient and effective. You don't have to hand over the product, there is no problem with storage, and you don't even have to come to the company to push the stamp. I would like to broaden this opportunity.”
Transform once every 100 years
Rivals from different industries such as “○○Pay” have entered the financial industry one after another. Moreover, low interest rates have become the norm, and it will be difficult to make a profit with only loans, and the business environment of banks is not favorable.
“What is the new image of after-corona banking?”
President Sakai is now inviting opinions widely from within the company and having daily discussions in order to change banks.
Due to the corona shock, which is said to occur once every 100 years, many of Mizuho's business partners are having tough days.
Can the banks, as President Sakai says, make a big difference as a result of the shock? And is it a transformation that benefits companies and depositors? We will continue to look at our efforts.
Daisuke Nogami, Reporter, Ministry of Economics
Joined
Kanazawa Bureau in
2010, currently in charge of the financial industry in the Ministry of Economic Affairs