Mizuho CEO steps down after regulator hit on system issues

[TOKYO] Mizuho Financial Group chief executive officer Tatsufumi Sakai will step down after Japan's banking regulator issued a business improvement order on the lender, criticising it for shortcomings in governance and corporate culture behind a series of system glitches this year.

The Financial Services Agency said Mizuho did not pay enough attention or consideration to risks within its computer systems, according to a statement Friday. The regulator also said Mizuho failed to learn from past incidences and asked the bank to clarify who is responsible for the outages.

Mizuho said Sakai will step down April 1 and the country's third-biggest lender will accelerate efforts to select his successor.

It marks the culmination of a months long inspection by the country's watchdog into Mizuho to identify the root causes of the technical failures. The regulator originally planned to finish the inspection a lot earlier but had to extend it after the bank suffered fresh incidents in August and September.

Koji Fujiwara, CEO of Mizuho Bank, will also leave on April 1 and be replaced by Masahiko Kato Satoshi Ishii, who is currently the bank's IT head, will resign on April 1 Chairman Yasuhiro Sato will step down April 1, but stays on board until late June, when new board members chosen Mizuho has been plagued by major IT problems since it was created from the merger of three lenders more than two decades ago.

The smallest of Japan's three megabanks has also been struggling to catch up with bigger rivals which are expanding beyond traditional lending into investment banking and wealth management.

Mizuho had reemphasized its pledge not to repeat system failures after incidents in 2002 and 2011. Each time, the bank received business improvement orders from the regulator. Sakai, who became CEO in 2018, has been trying to reshape the bank and change its corporate culture. He made major modifications to its organisational structure to focus resources on growth areas and rein in costs. Despite the system troubles, Mizuho reported sharp profit growth for the first half ended in September and announced the first dividend hike in seven years.

BLOOMBERG