Mizuho CEO to Forgo Top Bank Industry Role After Glitches

(Bloomberg) — Mizuho Financial Group Inc.’s chief executive said he will refrain from taking a key bank industry advocacy role next month as he focuses on addressing a series of system glitches at Japan’s third-largest lender.

CEO Tatsufumi Sakai won’t become chairman of the Japanese Bankers Association on April 1 as earlier planned, he said Wednesday in his first news briefing since the outages emerged last month. The position is normally rotated annually among the nation’s three biggest banks.

“In a short period of time, four incidents happened back-to-back,” Sakai said at a press conference on Wednesday. “When I think about why they happened, I would say risk management failed to function as a result and I take it gravely.”

Independent Panel

Mizuho will set up an independent panel to investigate the glitches, which included ATMs swallowing up more than 5,000 cash cards and passbooks in late February. Fresh problems emerged last week, when a hardware failure caused a delay in 300 foreign-currency money transfers.

The incidents have prompted the Japanese lender to backtrack on a series of key appointments. Koji Fujiwara will remain CEO of its Mizuho Bank unit after April 1 to deal with the problems, instead of being succeeded by Managing Executive Officer Masahiko Kato and becoming chairman. Kato will assume the post eventually, Sakai said.

The Financial Services Agency is planning to conduct an on-site inspection of Mizuho’s banking unit, the Yomiuri reported earlier. The watchdog will consider penalties such as a business improvement order following the probe, the newspaper said.

Mizuho has been penalized for computer failures in the past, including an outage that delayed money transfers in the aftermath of Japan’s earthquake and tsunami 10 years ago. That incident also led to Mizuho forgoing the chairman role at the bank association.

(Updates with CEO comments in third paragraph.)

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