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Mizuho Holdings may accelerate job cuts, reduce wages

Mizuho Holdings Inc may cut workers' annual salaries by about 10 percent and will cut a fifth of its workforce to 25,000 by March 2004, accelerating its initial plan to cut the jobs by March 2006, to improve its balance sheet, Yomiuri newspaper reported, without citing anyone.

Mizuho, the world's largest bank by assets, also plans to close more branches than the 118 initially planned, the newspaper said.

A slump in the world's second largest economy and the government's move to accelerate bad-loan disposal pushed Mizuho to make more cost cuts so it can pay back its ?2 trillion (US$16.4 billion) in public funds received in the late 1990s, Yomiuri said.

Mizuho, which aims to complete its restructuring plan by the end of this month, will be the first major Japanese bank to reduce salaries as well as bonuses. This may lead to other banks following the move, Yomiuri said.

On Friday, Mizuho said it plans to get rid of as much as ?1.6 trillion of its worst loans, the first Japanese bank to respond to the government's call to get tougher on delinquent borrowers.

The lender will by March 2004 sell, write off, or recover 80 percent of loans to companies that moved into the "near-to-failure" or a worse category in the year ended March 31, spokesman Misao Yoneyama said. About ?2 trillion of lending at Mizuho's two main units entered those categories in the year ended March 31, the bank said in a May earnings report.

Mizuho is due to report first-half earnings on Nov. 25. The company in May said it expects to post group net income of ?40 billion for the six months ended Sept. 30, compared with a ?265 billion loss in the same period a year earlier.
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