Dominion Bond Rating Service says in a research note that the recent high-profile trading loss of Mizuho Securities Co. Ltd. may be bigger than expected, but it shouldn’t affect the parent bank’s credit quality.

Mizuho Securities Co., a majority-owned subsidiary of Mizuho Corporate Bank Ltd., incurred a large loss due to an erroneous order to trade shares of J-COM Co. Ltd. The final loss is believed to be well in excess of the ¥27 billion (approx. US$225 million) originally reported, DBRS says, “but this is viewed as easily manageable for a financial group of Mizuho’s size and financial resources”.

Mizuho Corporate Bank may be required to provide liquidity or capital to Mizuho Securities Co., “but given that the group had ¥1,476 billion unrealized equity gains (approx. US$12 billion) at September 30, this will not be a problem,” it says.

DBRS notes that Mizuho Corporate Bank (Canada) is currently launching a $300 million bearer deposit note program in the Canadian market.