Mizuho's New CEO Faces Legacy Issues From Decades-Old Merger

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

1 / 3Mizuho’s New CEO Faces Legacy Issues From Decades-Old Merger

(Bloomberg) — Mizuho Financial Group Inc. is tapping a relatively young career 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.

the latest tech news, global tech news daily, tech news today, startups, usa tech, asia tech, china tech, eu tech, global tech, in-depth electronics reviews, 24h tech news, 24h tech news, top mobile apps, tech news daily, gaming hardware, big tech news, useful technology tips, expert interviews, reporting on the business of technology, venture capital funding, programing language

Most Read from Bloomberg

    Japan’s third-largest lender named Mizuho veteran Masahiro Kihara as chief executive officer — its third since 2011 — on Monday. He’ll replace Tatsufumi Sakai on Feb. 1, a series of technical troubles that led to business improvement orders from the Financial Services Agency.

    Global Tech News Daily

    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. CEO’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.

    Global Tech News Daily

    ‘Risk Avoidance’

    “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. in Tokyo. “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 post-merger politics,” an influx of new employees and the reorganization of operations with digitalization, according to Makdad.

    Mizuho said on Monday 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.

    “We will take measures to enhance our frameworks for our people and organization and reform our corporate culture,” Mizuho said.

    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.

    Successful Integration

    To ensure the successful integration of the three banks, Mizuho for years tripled everything from executive positions and offices, and IT systems were not fully integrated. More recently, Mizuho has made a cost-cutting push to streamline operations, including its IT systems, resulting in chaos.

    In November, the regulator — in a rare departure from its prosaic style — criticized Mizuho for a culture of “not speaking up when something should be said, and doing only what’s been instructed.”

    A June report by a panel of outside experts commissioned by Mizuho also said there were many occasions when bank employees lacked initiative and failed to act beyond their direct responsibility to curb and solve the problems during the system trouble.

    “We are closely watching Mizuho’s corporate governance and management’s performance in evaluating its credit, given it received a business improvement order,” said S&P Global Ratings credit analyst Toshihiro Matsuo. “It remains unknown if it will lead to improvement of corporate governance with reported management appointments.”

    Current and former Mizuho employees say the bank’s culture of passivity will be hard to reform, citing deeply-entrenched divisions between employees from the three different banks. Concerns over cost cutting measures and shrinking opportunities also made employees fearful of taking risks or standing out, those employees said, asking not to be identified.

    Management Overhaul

    While Kihara is expected to implement some kind of management overhaul, he won’t be the first to attempt a restructuring. After a massive system outage in 2011, Mizuho combined its two commercial banking units to create a greater sense of unity among staff. After a public outcry when it was revealed in 2013 that Mizuho made loans to organized crime members, the lender also adopted a Western-style board structure, the first one to do so among megabanks, giving more authority to outside directors.

    Some Mizuho employees said that one reason successive attempts have failed was that many senior staff are strongly focused on satisfying the interests of their original bank before the merger. Japanese lenders, as part of a unique custom of solidifying business ties and ensuring roles for older workers, usher most employees beyond a certain age to a second job, often at client firms or affiliated companies such as leasing or insurance firms.

    While a chosen few stay on for senior management within the bank, many are appointed to their second job at around 50, with the unlucky ones being ushered on in their 40s. Such decisions are often based on connections through their first employer, helping to keep loyalties divided, the employees said.

    Mizuho named 59-year-old Seiji Imai, formerly of Dai-ichi Kangyo Bank, as its chairman on Monday. He will replace Yasuhiro Sato on April 1.

    The company previously announced that Masahiko Kato, who started at Fuji Bank, will become president of Mizuho’s core lending unit. Local media have said the appointments reflected Mizuho’s attempt to balance out the interests of the three factions.

    “I don’t think it’s just a coincidence that the key posts were balanced among executives from Mizuho’s predecessor banks,” Makdad said. “It shows that despite all its efforts to create ‘One Mizuho’, its executives are still cognizant of which predecessor bank other executives are from, and to some degree sensitive to it.”

    (Updates with announcement of appointment in second paragraph, business improvement plan in seventh)

    Most Read from Bloomberg Businessweek

      ©2022 Bloomberg L.P.

      News Related

      OTHER NEWS

      Soaring refining margin bodes well for oil firms

      The industrial complex in the southern port city of Ulsan where production bases of Korea’s major petrochemical companies are located (Yonhap)South Korean oil refiners’ key profitability measure has been rising ... Read more »

      Buckle (BKE) Gains As Market Dips: What You Should Know

      Buckle (BKE) closed at $37.24 in the latest trading session, marking a +1.36% move from the prior day. This change outpaced the S&P 500’s 0.37% loss on the day. – ... Read more »

      AutoNation (AN) Dips More Than Broader Markets: What You Should Know

      In the latest trading session, AutoNation (AN) closed at $103.57, marking a -0.46% move from the previous day. This change lagged the S&P 500’s 0.37% loss on the day. – ... Read more »

      FuboTV Inc. (FUBO) Stock Moves -0.3%: What You Should Know

      fuboTV Inc. (FUBO) closed at $10.07 in the latest trading session, marking a -0.3% move from the prior day. This change was narrower than the S&P 500’s 0.37% loss on ... Read more »

      Fiverr International (FVRR) Dips More Than Broader Markets: What You Should Know

      In the latest trading session, Fiverr International (FVRR) closed at $81.01, marking a -0.52% move from the previous day. This change lagged the S&P 500’s daily loss of 0.37%. – ... Read more »

      Sterling Construction (STRL) Gains As Market Dips: What You Should Know

      Sterling Construction (STRL) closed at $27.51 in the latest trading session, marking a +1.63% move from the prior day. The stock outpaced the S&P 500’s daily loss of 0.37%. – ... Read more »

      Boise Cascade (BCC) Gains As Market Dips: What You Should Know

      Boise Cascade (BCC) closed at $77.20 in the latest trading session, marking a +0.69% move from the prior day. The stock outpaced the S&P 500’s daily loss of 0.37%. – ... Read more »

      CRISPR Therapeutics AG (CRSP) Gains As Market Dips: What You Should Know

      In the latest trading session, CRISPR Therapeutics AG (CRSP) closed at $62.36, marking a +0.76% move from the previous day. This move outpaced the S&P 500’s daily loss of 0.37%. ... Read more »

      Bausch Health (BHC) Dips More Than Broader Markets: What You Should Know

      Bausch Health (BHC) closed the most recent trading day at $24.39, moving -0.53% from the previous trading session. This move lagged the S&P 500’s daily loss of 0.37%. – Zacks ... Read more »

      ETF Strategies to Consider for February as Fed's Rate Hike Nears

      Wall Street has been mostly kind to investors so far in February after a tough January. Market participants are upbeat about improving U.S. economic conditions as reflected by encouraging fourth-quarter ... Read more »

      Bank of Nova Scotia (BNS) Gains As Market Dips: What You Should Know

      Bank of Nova Scotia (BNS) closed at $73.75 in the latest trading session, marking a +0.78% move from the prior day. This move outpaced the S&P 500’s daily loss of ... Read more »

      Fox (FOXA) to Report Q2 Earnings: What's in the Offing?

      Fox FOXA is set to report second-quarter fiscal 2022 results on Feb 9.For the quarter, the company’s current Zacks Consensus Estimate for earnings is pegged at breakeven against a loss ... Read more »

      Generac Holdings (GNRC) Gains As Market Dips: What You Should Know

      In the latest trading session, Generac Holdings (GNRC) closed at $279.97, marking a +0.01% move from the previous day. This move outpaced the S&P 500’s daily loss of 0.37%. – ... Read more »

      Spirit And Frontier Announce $6.6 Billion Merger

      Spirit Airlines Incorporated (NYSE:SAVE) and Frontier Group Holdings Inc (NASDAQ:ULCC) have announced a $6.6 billion merger to create one of the largest low-cost airlines in the U.S. The new airline ... Read more »

      First Trust Energy AlphaDEX Fund (FXN) Hits a 52-Week High

      The First Trust Energy AlphaDEX Fund FXN is probably a suitable pick for investors looking for momentum. FXN hit a 52-week high and is up 59.6% from its 52-week low ... Read more »

      Stock futures inch higher after S&P, Nasdaq fall to start the week

      U.S. stock index futures crept higher during overnight trading Monday, after the major averages moved between gains and losses during regular trading as the market awaits key inflation data later ... Read more »

      The former president of Elon Musk's Neuralink has invested in the rival company that beat it to human trials

      © Provided by Business Insider Elon Musk, cofounder of Neuralink. Patrick Pleul/picture alliance via Getty Images Ex-president of Neuralink, Max Hodak, said Friday he’s invested in rival biotech company Synchron. ... Read more »

      Immunovant (IMVT) Reports Wider-Than-Expected Loss in Q3

      Immunovant, Inc. IMVT reported a net loss of 36 cents per share in the third quarter of fiscal 2022 (ended Dec 31, 2021), wider than the Zacks Consensus Estimate of ... Read more »

      Buckle's (BKE) Sales Run Continues in January, Comps Gain 4.2%

      The Buckle, Inc. BKE looks well poised on the back of its robust strategic efforts, including strength in e-commerce business and an impressive sales trend. BKE has been putting up ... Read more »

      6 Best-Leveraged ETF Areas of Last Week

      Wall Street put up a moderate show last week with the S&P 500 (up 1.6%), the Dow Jones (up 1.1%), the Nasdaq Composite (up 2.4%) and the Russell 2000 (up ... Read more »

      Interpublic (IPG) to Report Q4 Earnings: What's in the Cards?

      The Interpublic Group of Companies, Inc. IPG is scheduled to report fourth-quarter 2021 results on Feb 10, before the opening bell. – Zacks Let’s check out how things have shaped ... Read more »

      Mednax (MD) Buys Night Lite Pediatrics to Boost Portfolio

      Mednax, Inc. MD and its affiliated practices Pediatrix Medical Group recently acquired Night Lite Pediatrics, LLC in Orlando, FL. Night Lite is a private 13-clinic pediatric urgent care practice. The ... Read more »

      Best Growth Stocks to Buy for February 7th

      Here are three stocks with buy ranks and strong growth characteristics for investors to consider today, February 7th: – Zacks Apple AAPL: This company whose business primarily runs around its ... Read more »

      Gol Linhas (GOL) Stock up 16.2% in a Month: More Upside Left?

      Shares of Gol Linhas GOL have displayed an uptrend on the bourses over the past month, gaining 16.2% against its industry’s 3.1% decline. – Zacks Image Source: Zacks Investment Research ... Read more »

      Top Research Reports for Bank of America, Coca-Cola & salesforce

      Monday, February 7, 2022 The Zacks Research Daily presents the best research output of our analyst team. Today’s Research Daily features new research reports on 16 major stocks, including Bank ... Read more »

      Sanofi's (SNY) Enjaymo Gets FDA Nod For Rare Blood Disorder

      Sanofi SNY announced that the FDA has approved its monoclonal antibody, Enjaymo (sutimlimab-jome), to decrease the need for red blood cell transfusion due to hemolysis in adult patients with cold ... Read more »

      The Zacks Analyst Blog Highlights: Alphabet, T-Mobile US, Advanced Micro Devices, Mondelez International and Chubb

      For Immediate Release Chicago, IL – February 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the ... Read more »

      The IRS will move away using ID.me's facial recognition verification for IRS.gov

      © Provided by Business Insider Page 13 of a slide presentation describing how to link your IRS account with ID.me. ID.me The IRS will eventually stop using ID.me identity verification ... Read more »

      IRS to stop using facial recognition for identity verification

      Signage outside the Internal Revenue Service (IRS) headquarters in Washington, D.C.Bloomberg | Bloomberg | Getty Images The IRS on Monday announced it will stop using a controversial third-party service for ... Read more »

      Why Mid-America Apartment Communities (MAA) is a Great Dividend Stock Right Now

      Whether it’s through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you’re an income investor, your primary focus is ... Read more »

      Surging Earnings Estimates Signal Upside for Xilinx (XLNX) Stock

      Investors might want to bet on Xilinx (XLNX), as earnings estimates for this company have been showing solid improvement lately. The stock has already gained solid short-term price momentum, and ... Read more »

      BCB Bancorp (BCBP) is a Top Dividend Stock Right Now: Should You Buy?

      Whether it’s through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. But when you’re an income investor, your primary focus is ... Read more »

      The Zacks Analyst Blog Highlights: AbbVie, Merck, Eli Lilly, Novartis and Pfizer

      For Immediate Release Chicago, IL – February 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the ... Read more »

      BankUnited (BKU) Stock up 3.4% on New Share Repurchase Plan

      BankUnited, Inc. BKU has announced a new share repurchase plan. The company’s board of directors has approved the repurchase of up to $150 million in shares of BKU’s outstanding stock. ... Read more »

      TEGNA Inc. (TGNA) Soars 7.4%: Is Further Upside Left in the Stock?

      TEGNA Inc. TGNA shares rallied 7.4% in the last trading session to close at $21.34. This move can be attributable to notable volume with a higher number of shares being ... Read more »

      Can BCB Bancorp (BCBP) Run Higher on Rising Earnings Estimates?

      BCB Bancorp (BCBP) could be a solid choice for investors given the company’s remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue ... Read more »

      Earnings Estimates Moving Higher for Marathon Oil (MRO): Time to Buy?

      Marathon Oil (MRO) could be a solid choice for investors given the company’s remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue ... Read more »

      Transport ETFs to Buy on Solid Q4 Earnings

      The fourth-quarter earnings picture for the transportation sector has been robust. This is especially true as earnings of 95.2% of the market capitalization of the sector that has reported so ... Read more »

      The Zacks Analyst Blog Highlights: STMicroelectronics, BP and Asbury Automotive Group

      For Immediate Release Chicago, IL – February 7, 2022 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the ... Read more »

      Earnings Estimates Moving Higher for Robert Half (RHI): Time to Buy?

      Robert Half (RHI) could be a solid choice for investors given the company’s remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue ... Read more »