18 MIZUHO BANK EUROPE N.V. Report of the Board of Managing Directors We are pleased to present the financial statements of Mizuho Bank Europe N.V. for the financial year 2018. 3.1 Mizuho Bank Europe We continued pursuing our strategy by supporting the overall Mizuho Group’s strategy on being a “financial services consulting group” and aiming to be the most trusted partner in solving problems and supporting the sustainable growth of our customers and communities. As such, we have worked extremely hard to offer our customers a complete value chain and we strived to be the most trusted financial services group with a global presence and a broad customer base. To ensure the whole organization fully embrace our Vision & Strategy, we have in 2018 spent a lot of time internally and working with all staff to further shape and embed our strategy and understand our corporate culture. As a result of hard work and motivated staff, we have been able to provide even more value to our customers and support them in their medium-/long-term strategies. Keeping in mind that 2018 remained a challenging year when it comes to even more complex and demanding regulatory requirements, combined with an extremely tight labor market, we are extremely proud to have been able to close a successful year. MBE and the Management Board remain committed to supporting the Mizuho Group as well as its customers throughout the region. With great uncertainty around Brexit and as part of Mizuho Group’s broader strategic realignment, MBE’s importance has grown, and we are working to ensure that Mizuho is able to continue its important work – without disruption – no matter the outcome of Brexit. 3.2 Market Developments and Outlook The global economy maintained 3.7% growth in 2018 which is comparable to 2017 according to the World Economic Outlook by the IMF. However, it has lost momentum towards the end of 2018. The GDP growth decelerated in almost all regions and countries except for the US. The Chinese economy somewhat slowed down in 2018 as trade dispute between the US and China deepened. Emerging economies have faced the risk of capital outflow amid the continuous rate hike by the US. On the other hand, the US economy accelerated in 2018 boosted by fiscal measures. In 2019, the growth of the global economy will slow down to 3.6% based on the IMF outlook as the positive impact of the US fiscal measures will wane gradually. Under these circumstances, Eurozone economy slowed in 2018 as exports flattened amidst the global economic downturn. In the third quarter of 2018, Eurozone economy unexpectedly weakened to 0.2% quarter on quarter as the German car production fell sharply due to the introduction of new emission tests. However, this slump in car production is temporary and Eurozone domestic demand is expected to keep expanding at a modest pace. According to the forecast by the European Central Bank, Eurozone economy will grow by 1.8% in 2019 which is slightly lower than 2.0% in 2018 and 2.4% in 2017. The Japanese economy also slowed down in the first half of 2018 primarily due to weak exports. However, private consumption and investment remained solid. In 2019, Japan’s economy is expected to maintain a steady growth supported by domestic demand although there will be some negative impact of consumption tax hike in October. Mizuho Research Institute forecast that Japan will grow by 0.7% in FY2019 after 0.7% in FY2018 and 1.9% in FY2017.