Mizuho Financial Group is planning to buy out its brokerage and trust bank units, a source familiar with the matter said on Saturday, in a roughly $4 billion deal aimed at helping the lender grow beyond sluggish commercial banking business in Japan.

Japan's second-largest bank by assets is planning to buy out minority shareholders in Mizuho Securities <8606.T>, Mizuho Trust & Banking <8404.T> and Mizuho Investors Securities <8607.T>, said the source, confirming an earlier report in the Nikkei newspaper.

The buyout will likely be carried out around October after approval at an annual shareholders meeting in June, according to the source, who was not authorised to speak publicly about the planned transaction.

Mizuho and rival banks Mitsubishi UFJ Financial Group <8306.T> and Sumitomo Mitsui Financial Group <8316.T> are trying to strengthen investment banking and other operations as they face weak prospects in their core lending business in Japan.

The deal would allow Mizuho, created in 2000 through a merger of three banks, to reduce operational overlap while keeping more profits within the group as it prepares for tougher capital requirements due to be introduced in the coming years.

Mizuho has 75 percent in Mizuho Trust in terms of voting rights, 60 percent in Mizuho Securities and 67 percent in Mizuho Investors Securities. The stakes Mizuho does not own in those firms are worth roughly 300 billion yen ($3.7 billion) at current market prices.

Mizuho, which has a market value of about $43 billion, plans to issue new shares and exchange them for minority holdings in the units, the Nikkei newspaper said.

Mizuho will look into merging Mizuho Securities, an investment bank, with retail broker Mizuho Investors Securities next year, hoping to accelerate a push into Asia and other overseas markets, the Nikkei said.

It also plans to forge closer ties between Mizuho Trust and its retail banking arm. Among likely steps, Mizuho Bank will effectively take over the management of the trust bank's ordinary savings accounts and ATMs, the Nikkei said.

(Reporting by Taiga Uranaka, additional reporting by Santosh Nadgir in Bangalore; Editing by Yoko Nishikawa)