Tatsufumi Sakai, chairman and chief executive of Mizuho Financial Group Inc., is set to step down as financial regulators aim to punish the company for its negligent handling of repeated problems with its main banking unit, sources familiar with the matter said Thursday.
Mizuho Financial Group, one of Japan’s leading banking groups, is seeking to regain public trust by assuming leadership responsibilities through Sakai’s resignation.
The move comes as the Financial Services Agency plans to slap Mizuho Financial Group and Mizuho Bank with administrative penalties, calling for business improvement measures, possibly during this month, while the Finance Ministry plans to ‘order a review of the bank’s operations for alleged violation of the Foreign Exchange and Foreign Trade Control Act in September, the sources said.
The banking group company has started the process to choose Sakai’s successor with the aim of finalizing the choice by the end of this year, although the timeline could be pushed back to next spring if the current senior management chooses to put in place. Implement thorough preventative measures before putting back on leadership, the sources say.
Mizuho Bank, one of Japan’s mega-banks with branches across the country, has experienced eight system issues this year, affecting ATMs and causing other problems.
Regarding the problem of the September 30 system, which caused delays in some of its money transfers for foreign exchange operations, the Ministry of Finance believes that Mizuho Bank has not taken the necessary measures to prevent money laundering. money before currency remittances, the sources said.
The Financial Services Agency is expected to inform Mizuho Bank of its findings in the near future, following the investigation into the series of system-related issues.
The agency believes the problems are due to mismanagement by inexperienced operators, as the system itself does not appear to have major problems, people familiar with the matter said.
Although Mizuho Bank drew up preventative measures in June after encountering four system problems, the bank has since been hit with such problems four more times.
In June, Mizuho Bank announced pay cuts ranging from 10% to 50% for Sakai and 10 other executives to take responsibility for the issues.
Shortly before the pay cuts were announced, Mizuho bank manager Koji Fujiwara was due to resign, but the bank postponed the decision to replace him in the hope that preventative measures progress.
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