Offsetting of financial assets and financial liabilities

12 Months Ended

Mar. 31, 2020

Offsetting of financial assets and financial liabilities

28. Offsetting of financial assets and financial liabilities

Derivatives

The MHFG Group enters into master netting arrangements such as International Swaps and Derivatives Association, Inc. (“ISDA”) or similar agreements with counterparties to manage mainly credit risks associated with counterparty default. If the predetermined events including counterparty default occur, these enforceable master netting arrangements or similar agreements give the Group the right to offset derivative receivables and derivative payables and related financial collateral such as cash and securities with the same counterparty.

Repurchase and resale agreements and securities lending and borrowing transactions

Repurchase and resale agreements and securities lending and borrowing transactions are generally covered by industry standard master repurchase agreements and industry standard master securities lending agreements with netting terms to manage mainly credit risks associated with counterparty default. In the event of default by the counterparty, these agreements with netting terms provide the Group with the right to offset receivables and payables related to such transactions with the same counterparty, and to liquidate the collateral held.

The following table provides information about the offsetting of financial assets and financial liabilities at March 31, 2019 and 2020. The table includes derivatives, repurchase and resale agreements, and securities lending and borrowing transactions that are subject to enforceable master netting arrangements or similar agreements irrespective of whether or not they are offset on the Group’s consolidated balance sheets.

							Amounts not offset on the balance sheet(3)
	Gross amounts recognized		Gross amounts offset on the balance sheet		Net amounts presented on the balance sheet(2)		Financial instruments(4)			Cash collateral			Net amounts
	(in billions of yen)
2019
Assets(1):
Derivatives		7,403		—		7,403		(5,903	)		(528	)		972
Receivables under resale agreements		12,589		—		12,589		(12,579	)		—			10
Receivables under securities borrowing transactions		1,921		—		1,921		(1,894	)		—			27
Total		21,913		—		21,913		(20,376	)		(528	)		1,009
Liabilities(1):
Derivatives		6,978		—		6,978		(5,766	)		(769	)		443
Payables under repurchase agreements		14,312		—		14,312		(14,309	)		—			3
Payables under securities lending transactions		932		—		932		(931	)		—			1
Total		22,222		—		22,222		(21,006	)		(769	)		447
2020
Assets(1):
Derivatives		9,819		—		9,819		(7,723	)		(629	)		1,467
Receivables under resale agreements		17,347		—		17,347		(17,197	)		—			150
Receivables under securities borrowing transactions		1,753		—		1,753		(1,709	)		—			44
Total		28,919		—		28,919		(26,629	)		(629	)		1,661
Liabilities(1):
Derivatives		9,220		—		9,220		(7,519	)		(1,215	)		486
Payables under repurchase agreements		17,542		—		17,542		(17,191	)		—			351
Payables under securities lending transactions		626		—		626		(623	)		—			3
Total		27,388		—		27,388		(25,333	)		(1,215	)		840

Notes:

(1) Amounts relating to master netting arrangements or similar agreements where the MHFG Group does not have the legal right of set-off or where uncertainty exists as to the enforceability of these agreements are excluded. For derivatives, the table includes amounts relating to over-the-counter (“OTC”) and OTC-cleared derivatives that are subject to enforceable master netting arrangements or similar agreements.

(2) Derivative assets and liabilities are recorded in Trading account assets and Trading account liabilities, respectively.

(3) Amounts do not exceed the net amounts presented on the balance sheet and do not include the effect of overcollateralization, where it exists.

(4) For derivatives, amounts include derivative assets or liabilities and securities collateral that are eligible for offsetting under enforceable master netting arrangements or similar agreements.