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Mizuho to Delay Merger of Broker Units Again

Mizuho Financial Group, Japan's second-largest bank, will further delay the merger of two affiliate brokerages due to ballooning subprime losses at unit Mizuho Securities, the Nikkei business daily said on Friday.

The bank has already pumped about 400 billion yen (US$4 billion) into Mizuho Securities after the broker was hit by bad investments in U.S. subprime mortgages.

The unlisted unit was originally scheduled to merge with another Mizuho affiliate, Shinko Securities, in January to form Japan's fourth-largest securities company in terms of assets under management.

That deal has already been postponed to May because of the difficulty in setting a merger ratio, as Mizuho Securities' subprime investments are now nearly impossible to price.

The merger may be pushed back to January 2009 due to further subprime losses at Mizuho Securities, the Nikkei said.

Both Mizuho Securities and Shinko said in a joint statement that nothing had been decided.

A spokeswoman for Mizuho Financial Group, Masako Shiono, declined to comment.

Mizuho Securities reported a first-half net loss of 27 billion yen, although domestic media reports have said that could widen to 100 billion yen for the full year. Unlisted Mizuho Securities reports earnings only twice a year.