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Japan, South Korean banks form business tie-up

Mizuho Corporate Bank, one of three banking units of Mizuho Financial Group, will pay about 10 billion yen (US$85 million) to acquire a 0.49 percent stake in Shinhan, the bank said in a statement.

The investment marks the first time a Japanese financial company has invested in a major Korean banking institution, according to South Korea’s Financial Supervisory Commission.

Mizuho Corporate Bank also announced a tie-up with state-run Korea Development Bank.

Mizuho Financial Group, Japan’s second-biggest bank by assets, said in July that its profit rose 33 percent in the fiscal first quarter as cost-cutting efforts and stock market gains lifted the company’s performance.

The healthy earnings underline how Mizuho and other Japanese banks have recovered since disposing of much of their bad loans after the bursting of the country’s real estate and stock bubble in the 1990s.

New reports have said Mizuho plans to gain a foothold across Asia through the tie-up with the two banks, which have strong business ties with leading South Korean companies such as Samsung Electronics Co. and Hyundai Motor Co.

Mizuho has also said that it plans to list its stock on the New York Stock Exchange during the current fiscal year ending in March 2007 to raise further revenue.