New Mizuho boss faces legacy issues from merger
Mizuho Financial Group Inc is tapping a relatively young insider to turn around the bank that’s been plagued by a series of technical disruptions and is still grappling with the legacy of a three-way merger more than two decades on.
Japan’s third-largest lender yesterday named Mizuho veteran Masahiro Kihara as president — its third since 2011. He’ll replace Tatsufumi Sakai on Feb 1, a series of technical troubles that led to business improvement orders from the Financial Services Agency.
At 56, Kihara is seven years younger than his counterpart at Sumitomo Mitsui Financial Group Inc and four years the Mitsubishi UFJ Financial Group Inc president’s junior. His experience in risk management helped him secure the role, according to people familiar with the matter, who asked not to be identified as the appointment is confidential.
Mizuho’s technical glitches that took down Sakai trace as far back as the early years of the century, after the group was formed through the merger of Dai-ichi Kangyo Bank, Fuji Bank and Industrial Bank of Japan in the midst of the nation’s banking crisis in 2000.
Unresolved cultural and structural problems stemming from the combination still persist and largely contributed to the bank’s most recent technical woes.
“The task for the next CEO is making sure that related issues with Mizuho’s corporate culture such as a tendency toward risk avoidance are overcome,” said Michael Makdad, an analyst at Morningstar Inc. “Both Mizuho and regulators know it’s important.”
“Although this won’t be easy, Mizuho does have some tailwinds going forward such as the progressive retirement of older workers who faced tricky postmerger politics, an influx of new employees and the reorganisation of operations with digitalisation,’’ he said.
Mizuho said yesterday that it submitted a business improvement plan to the FSA, based on the regulator’s order issued in November.
“The plan includes steps for improving IT systems as well as customer relations and crisis management,’’ it said in a statement.
Despite having a solid reputation and a well-connected family, few executives expected Kihara — who joined the Industrial Bank of Japan in 1989 — to nab the top job because of his age.
Directors only decided in the past week to go with a candidate who is young enough to signal a definitive break from Mizuho’s deep-rooted problems, according to a person with knowledge of the matter who asked not to be identified.
His appointment follows a series of system failures at Mizuho’s commercial arm since February 2021, which included ATMs swallowing up more than 5,000 cash cards and another disruption in which it failed to carry out anti-money laundering precautions.
Mizuho also named 59-year-old Seiji Imai, formerly of Dai-ichi Kangyo Bank, as its chairman yesterday. He will replace Yasuhiro Sato on April 1.