NEWSMAKER-No more Mr Nice guy at top of Mizuho

By Taiga Uranaka and Taro Fuse

TOKYO, May 14 (BestGrowthStock) – Takashi Tsukamoto may have the
reputation of a congenial academic, but those who have seen the
Mizuho Financial Group (8411.T: ) CEO erupt like a geyser don’t
doubt he has the steel to tackle the underperformance of
Japan’s No.2 bank.

Tsukamoto, an industry veteran for almost 40 years, took
the reins of of Mizuho last year pledging tighter risk control
and a return to the basics after the financial crisis savaged
profits at the bank.

Tsukamoto is now under pressure to be more aggressive to
catch up with rivals in fundraising and dealmaking now that the
crisis dust has settled.

Mizuho has been lagging behind smaller rival Sumitomo
Mitsui Financial Group (8316.T: ), Japan’s No. 3 bank by assets,
in profits and market capitalisation.

The biggest challenge for Tsukamoto, a 59-year-old Harvard
MBA holder who speaks fluent English, may be exerting
leadership over the sprawling operation, which in many ways is
still divided up among the three banks that merged to create
Mizuho almost a decade ago.

“It’s true that we have some legacy issues on our back,”
Tsukamoto told a news conference on Friday.

Tsukamoto was announcing the bank would raise up to 800
billion yen ($8.7 billion) in a share sale to meet stricter
global banking regulations, following boosts at rivals
Mitsubishi UFJ Financial Group (8306.T: ) and SMFG.
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But Mizuho has yet to make the kind of big deals seen at
its rivals to move beyond traditional lending into investment
banking and overseas operations, to offset weak domestic growth
prospects due to Japan’s declining population.

While MUFG has taken a signficant stake in Morgan Stanley
(MS.N: ) and set up two securities ventures in Japan, and
Sumitomo Mitsui bought Citigroup’s (C.N: ) Japanese broking and
investment banking units, Mizuho has just a small equity stake
in Merrill Lynch.

“Given its large corporate structure, Mizuho’s
decision-making has not been as fast as other banks,” said Shin
Tamura, a banking analyst at Barclays Capital Japan.

GEYSER

Some have questioned whether Tsukamoto, known for his
good-natured personality, can exert the strong leadership
necessary to steer the giant bank, but those who know him
closely have a different impression.

One Mizuho banker said Tsukamoto could turn into a
“geyser”, describing his occasional bursts of anger.

During a meeting in December, Tsukamoto was going over
changes to the personnel system with human resources managers
from the group’s units, and one manager was opposed to some of
the changes, the banker said.

“Don’t think only about your unit! Think about the interest
of the whole group!” Tsukamoto shouted, according to the
banker, who added that those at the meeting were surprised to
see such a short-tempered side to him.

That suggests Tsukamoto, despite his conservative approach,
may be ready to get tough when it comes to dealing with
Mizuho’s power structure, which insiders say has slowed down
decision-making and weakened the chain of command.

Mizuho has a “two-bank system”, one for retail and smaller
businesses, and another for large businesses, so there are
three main units run by three different heads.

Top executives that have led Mizuho since its creation,
including Tsukamoto’s predecessor Terunobu Maeda, have also
remained as chairmen of these units, further crowding the
management team.

Mizuho announced on Friday that Maeda and the chairmen of
the two units would step down in June.

Investors will be looking for Tsukamoto to lead the bank’s
recovery before more value is eroded.

Shares in Mizuho have fallen by more than a quarter since
Tsukamoto took the helm in January last year, underperforming
smaller losses at SMFG, MUFG and significantly lagging a
one-third gain in the Nikkei average (.N225: ).

“My impression is that Mizuho lacks a single voice. It’s
somewhat like Democratic Party of Japan in that different
people say different things,” said a banking analyst, who
declined to be named given sensitive nature of the topic.

“Mizuho has been weak in making strategy and its
execution.”

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(Editing by Lincoln Feast)

NEWSMAKER-No more Mr Nice guy at top of Mizuho