March 22 (Bloomberg) -- Mizuho Financial Group Inc. 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. ATMs located at Mizuho’s 440 branches have resumed operating, spokesman Nariyuki Murakami said today.
The bank, Japan’s third-biggest by market value, is studying the cause of the problem that started on March 15, four days after the country’s most powerful earthquake, and 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 dropped 7.7 percent.
The bankers association announced in September that Satoru Nishibori, president of Mizuho Bank Ltd., would replace Sumitomo Mitsui Financial Group Inc.’s Masayuki Oku as chairman of the Japanese Bankers Association from April 1.
“The chairman plays a role in leading Japanese banks overall, which is a very large responsibility,” Nishibori said yesterday at a press conference in Tokyo, according to spokeswoman Masako Shiono. “To be honest, I don’t think it’s appropriate to assume the post from April,” he said.
Sumitomo Mitsui’s Oku will extend his tenure as head of the lobbying group 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.
Mizuho’s system 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.
The benchmark Nikkei 225 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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