Southeast Asia's vulnerability to a slowing China and the prospect of tighter U.S. monetary policy isn't deterring Japan's third-largest lender by revenue from seeking opportunities in the high-growth region.
China's economic slowdown and an interest rate increase in the U.S. is undoubtedly negative for ASEAN, Yasuhiro Sato, chief executive officer and president of Mizuho Financial Group, told CNBC.
"The general economic situation is slowing down but that is a good business opportunity for us to expand in Asia," pointing to his main target areas of commercial ranking businesses, asset management businesses, and debt capital markets.
ASEAN, or the Association of Southeast Asian Nations, is highly exposed to China's economy and as Beijing experiences its slowest pace of annual economic expansion since 1990, Chinese demand for ASEAN goods is waning.
That's reflected in the region's weak export picture: Indonesian exports have been tanking for ten straight months, Thailand has witnessed a seven-month losing streak and Philippine exports have declined since April.
Moreover, Southeast Asian currencies like the rupiah and ringgit have crashed to lows not seen since the Asian Financial Crisis on the back of sliding commodity prices, high dollar-denominated debt levels and political worries. Experts say a tightening of U.S. monetary policy this year could worsen these ailments and trigger severe capital outflows.
All these factors are problematic for Japanese corporates like Mizuho who have invested heavily in ASEAN, a region with robust loan demand and some of Asia's highest growth rates.
Earlier this year, it was reported by the Wall Street Journal that Mizuho offered to buy a 60 percent stake in the Bank of Commerce, the Philippines' 15th largest bank by assets. Mizuho declined to comment on the reported approach.
The Japanese lender also owns a 15 percent stake in the Joint Stock Commercial Bank for Foreign Trade of Vietnam and is the primary sponsor of a fund that part owns Tata Technologies. Mizuho also signed a memorandum of understanding with Thailand's Siam Commercial Bank last year.