Mizuho CEO likely to survive mob loan scandal - sources

TOKYO Fri Oct 25, 2013 6:41am IST

Mizuho Financial Group President and CEO Yasuhiro Sato speaks during a news conference on the merging of Mizuho Bank and Mizuho Corporate Bank in Tokyo July 1, 2013. REUTERS/Issei Kato/Files

Mizuho Financial Group President and CEO Yasuhiro Sato speaks during a news conference on the merging of Mizuho Bank and Mizuho Corporate Bank in Tokyo July 1, 2013.

Credit: Reuters/Issei Kato/Files

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TOKYO (Reuters) - The president and CEO of Japan's Mizuho Financial Group(8411.T), Yasuhiro Sato, is likely to survive a scandal involving loans to members of organised crime syndicates, sources familiar with the matter said on Friday.

Japan's second-largest bank by assets has been under fierce public criticism after top management failed to take action over the loans for more than two years.

Instead of sacking Sato, Mizuho is considering a pay suspension, said the sources. The Nikkei business daily said Sato was likely to have his pay suspended for six months while more than 30 senior executives would have their pay cut.

Takashi Tsukamoto, chairman of both Mizuho Financial and the core banking unit Mizuho Bank, is likely to step down from his post at Mizuho Bank, said the sources, who declined to be identified because they were not authorised to discuss the matter publicly.

A Mizuho spokesman said the bank had made no decision on how it would deal with the matter.

The measure is among steps the bank is expected to report to regulators on Monday.

Japan's Financial Services Agency late last month issued a business improvement order on Mizuho for failing to terminate loans to crime syndicate members more than two years after the bank found out about them.

Mizuho has hired a panel of outside lawyers to investigate the scandal. The bank is planning to hold a news conference on Monday, the sources added. (Reporting by Taiga Uranaka and Taro Fuse; Editing by Edmund Klamann and Dean Yates)

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