Mizuho heads likely to roll over glitches


The largest bank in the world, Mizuho now expects a loss of 1.01 trillion ($7.7 billion) for the year

By Alex Frew McMillan and reports

TOKYO, Japan -- Mizuho Holdings Inc., the world's largest bank by assets, is snarled in a mammoth tech-support problem that is proving hard to patch.

Japanese media reports say that three top-ranking executives are likely to resign over the disaster, which has delayed millions of bank transfers -- making it hard for bank customers to get or use their money.

The problem stems from March 31, when the bank group went ahead with integration of its companies and their computer systems at the end of the business year.

Mizuho was a holding company made up of Dai-Ichi Kangyo Bank, Fuji Bank and Industrial Bank of Japan. As of April 1, they officially and legally combined into two companies, Mizuho Bank and Mizuho Corporate Bank.

Mizuho went ahead with its plan, and the computer integration. But bank officials were warned that the computer systems weren't ready to merge, according to media reports in Japan.

Starting April 1, Mizuho customers have been experiencing delays in transferring money, with as many as 2.5 million transfers held up at one time.

Problems still ongoing

The bank still had not corrected all the problems as of this weekend. Staff were working overtime to try to clear the problem.

Now the three most-recent presidents of Mizuho's member banks look likely to hand in their resignations over the matter.

Katsuyuji Sugita, of Dai-Ichi Kangyo, Yoshiro Yamamoto, of Fuji Bank, and Masao Mishimura, of Industrial Bank of Japan, stepped down as presidents of their respective banks on April 1, as part of the reorganization. They were also Mizuho's joint CEOs before the overhaul.

They currently serve as "special advisers" to the bank, but are likely to take responsibility for the computer problem by leaving the company altogether. The bank's board is mulling whether to require them to return part of their pensions.

But the ramifications may not end there. The Yomiuri Shimbun newspaper states that Mizuho President Terunobu Maeda had a report of the problem with delays but went ahead with the system integration anyway.

Maeda plans to take a pay cut to make amends. But industry watchers say harsher measures are still possible.

Mizuho stock is down 4.35 percent at 286,000 yen on Monday at the lunch break. By contrast, the benchmark Nikkei 225 index is up 1.05 percent at 11,077.72.

Mizuho also said on Friday that it expects a loss of 1.01 trillion yen ($7.69 billion) for the business year just ended. It had previously predicted a loss of 720 billion yen.