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Mizuho decides to reduce salaries in cost-cutting effort

Mizuho Financial Holdings, the world's biggest bank, will cut salaries of some 30,000 employees and slash its work force in a major restructuring to speed up its bad loan cleanup, Japanese newspapers said yesterday.

The measures are aimed at trimming personnel spending to reduce the bank's burden of bad-loan disposal efforts, the Asahi said.

Mizuho's official announcement is expected on Monday, the newspaper said.

It said Mizuho will be the first among Japan's biggest banks to slash salaries, but did not say the size of the planned cut. Mizuho currently spends ?280 billion (US$2.28 billion) in salaries, the report said.

Another newspaper, Yomiuri, said Mizuho employees face pay cuts of as much as 20 percent.

Mizuho plans to cut about 500 jobs by seeking early retirement volunteers from employees aged 45 years or older, the Asahi said.

Mizuho also will complete a planned job cut of 5,000 from the current work force of 30,000 by March 31, 2006, and slash more jobs by eliminating the number of bank outlets, the paper said.

Prime Minister Junichiro Koizumi is trying to accelerate the cleanup of bad loans at Japanese banks to turn around the nation's flagging economy.

The bank cleanup is expected to help the economy in the long run, but joblessness, which is at a near record high, is expected to climb.

Tokyo has said Japan's banks are weighed down by some ?43 trillion (US$355 billion) in nonperforming loans, though analysts say the actual figure is much higher. With so much capital tied up in deadbeat borrowers, banks have been reluctant to lend to smaller businesses.

Economy minister Heizo Takenaka is expected to announce later this week a policy package to speed up the bad debt cleanup, revive money-losing companies and stabilize Japan's economy.
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