Mizuho Financial Group Inc., Japan’s second biggest banking group, reported Thursday a 50 percent drop in profit for the fiscal year, taking a beating from U.S. subprime credit problems.

Expectations had been high that subprime-linked losses at Mizuho might be the worst among Japanese lenders after it drastically reduced its fiscal year forecast last month. The bank said its money-losing Mizuho Securities Co. had been hit hard by U.S. credit woes.

Mizuho said its profit fell to 311.22 billion yen ($2.97 billion) for the fiscal year ended March 31, down from 620.97 billion yen the previous year. Revenue climbed 10.3 percent to 4.524 trillion yen ($43.2 billion), said the Tokyo-based bank. It did not break out its quarterly numbers.

Mizuho said trading losses on securitized products at Mizuho Securities totaled 413 billion yen ($3.94 billion) for the year ended March 31.

Rising defaults on mortgage loans to borrowers with shaky credit histories in the United States have had a far-reaching financial impact because those loans have been collected and packaged into securities that were then sold to banks and investment companies around the world.

Compared to U.S. financial groups, the exposure of Japanese banks to the U.S. subprime mortgage problem has been relatively small, however.

For the fiscal year through March 2009, Mizuho is forecasting a profit of 560 billion yen ($5.35 billion) on 4.3 trillion yen ($41.07 billion) in revenue.

Mizuho shares rose 3.9 percent in Tokyo to 537,000 yen (US$5,128; euro3,321). Its earnings were announced about an hour after trading ended.