Mizuho ‘picks new president’
Banking group hit by series of glitches
Mizuho Financial Group Inc is set to appoint an insider as its next president to steer Japan’s third-largest banking group back from a series of technical disruptions, the latest of which struck yesterday.
The bank plans to name 56-yearold executive Masahiro Kihara as the next leader at a board meeting on Jan 17, according to people with knowledge of the plans who asked not to be identified as the move was not public.
Kihara is due to take office in April 1, succeeding current president Tatsufumi Sakai who announced in November that he would step down after persistent glitches prompted rebukes from regulators.
Several Mizuho officials, who asked not to be identified, said that while Kihara had been considered a candidate, many had still thought the older and more experienced vice president Seiji Imai would be chosen.
Kihara is a senior executive officer and head of the global products unit, which handles investment banking businesses such as syndicated loans, bond issues and mergers advice.
A career insider, he joined what is today’s Mizuho in 1989 and has also had stints in areas including risk management and finance.
Kihara’s background in risk management was considered a particular strength, the Mizuho officials said.
Yasuhiro Sasaki, a spokesman for Mizuho, said no decision had yet been made.
News of Kihara’s appointment, first reported by the Nikkei newspaper, comes as the group’s core lending unit Mizuho Bank Ltd briefly suffered disruptions to its corporate internet banking system.
Mizuho, the smallest of Japan’s three mega-banks, has been dogged by IT disruptions since it was created from the merger of three banks more than 20 years ago.
Its commercial arm has struggled with a series of system failures since February 2021. The disruptions have caused delays in millions of transactions, prompting Japan’s Financial Services Agency to issue business improvement orders.
“The next president’s immediate challenge is to take all the needed steps to start recovering the confidence of regulators and the public, that Mizuho won’t have more systems troubles in the future, after so many failures in the past,” said Michael Makdad, an analyst at Morningstar Inc in Tokyo.
Highlighting the challenges for Kihara, yesterday’s disruption triggered a new reprimand from the government.
“It’s extremely regrettable to have systems trouble,” Finance Minister Shunichi Suzuki told reporters. “Banks are key social infrastructure.”
The bank said the outage has been resolved.
The latest series of glitches started in February, when ATMs swallowed more than 5,000 cash cards and passbooks. A month later, a hardware failure caused a delay in 300 foreigncurrency money transfers.
By the time Sakai announced his planned departure, there had been eight such incidents since the beginning of 2021.
Kihara will also be tasked with making Mizuho more competitive, after bigger rivals have made bold bets to expand beyond traditional lending into investment banking and wealth management.
Sumitomo Mitsui Financial Group Inc last year spent more than $3.3 billion on deals in its Asia push. Mitsubishi UFJ Financial Group Inc agreed to sell MUFG Union Bank in the US and will use freed-up capital for growth areas such as digital and asset management businesses.
Mizuho has also been diversifying. In its latest move, the bank agreed to buy US-based Capstone Partners to expand in the business of helping private equity firms raise funds.
“The deal is slated to be completed in the first half of the year,’’ Mizuho said in a statement.