Mizuho Financial Group Inc. (8411) will face regulatory action after system failures following Japan’s March 11 earthquake delayed salary payments to 620,000 Japanese and forced the banking unit head to refuse a top lobbying post.
“We will ask Mizuho to submit a formal report at the correct time” on the cause of the outage, Financial Services Minister Shozaburo Jimi said at a press briefing today. “We will scrutinize the contents of the report and take appropriate action.”
The breakdown of Mizuho’s automated teller machines nationwide last week delayed transactions valued at 829.6 billion yen ($10 billion) and curtailed access to funds as the nation grappled with food, water and power shortages in the aftermath of the temblor. Satoru Nishibori, president of Mizuho Bank Ltd., said he won’t head the Japanese Bankers Association.
Operations at ATMs located at Mizuho’s branches have resumed, Nariyuki Murakami, a spokesman for Japan’s third- biggest bank by market value, said today. Tokyo-based Mizuho won’t accept money-transfer requests after 3 p.m.
The bank is studying the cause of the problem that started on March 15, four days after the country’s most powerful earthquake, delayed 1.16 million transactions.
Mizuho shares rose 7.9 percent to 150 yen in Tokyo Stock Exchange as stocks rallied on signs the nuclear crisis is easing. That curtailed Mizuho’s decline since March 10, the day before the earthquake, to 8.5 percent, while the Topix Banks Index (TPNBNK) dropped 7.7 percent.
The bankers association announced in September that Nishibori would replace Sumitomo Mitsui Financial Group Inc. (8316)’s Masayuki Oku as chairman of the lobbying group from April 1. He declined the position yesterday at a press conference in Tokyo, according to spokeswoman Masako Shiono.
“The chairman plays a role in leading Japanese banks overall, which is a very large responsibility,” Nishibori said, according to Shiono. “To be honest, I don’t think it’s appropriate to assume the post from April.”
The breakdowns follow a record magnitude-9 earthquake that triggered a tsunami and radiation leaks at a nuclear plant north of Tokyo. The system failure isn’t related to the earthquake, Nishibori said on March 17.
Sumitomo Mitsui’s Oku will extend his tenure as head of the Japanese Bankers Association for three months at the request of his scheduled replacement due to the earthquake, Oku said at a press conference this afternoon.
“I want to pass the baton to Mizuho when the situation settles down,” Oku said.
The benchmark Nikkei 225 (NKY) Stock Average has fallen about 8 percent since March 10. The decline in the stock market will have a limited effect on the capital of the country’s banks because they are sufficiently capitalized, Jimi added.
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