×

Japan lender Mizuho picks brokerage head Sakai as CEO

* Sakai to replace Yasuhiro Sato as CEO, effective April 1

* Sato to become non-executive chairman

* Sakai currently CEO of Mizuho Securities (Recasts with details from news conference)

Jan 15 (Reuters) - Japan's Mizuho Financial Group Inc , which continues to struggle with diminishing profits amid persistently low interest rates, has picked Tatsufumi Sakai, the head of its brokerage unit, as its next chief executive officer.

Sakai's appointment, who will succeed Yasuhiro Sato on April 1, marks a break with tradition at Japan's major commercial banking groups that typically promote executives at commercial banking operations to the top posts.

This "sends a big message across, within and outside the company" that the financial conglomerate now sees brokerage and investment banking business as its pillar alongside commercial banking, said Sato, who will become a non-executive chairman.

Mizuho, Japan's No.3 lender by market valuation, has been criticized for allowing infighting to continue among the three banks that merged to create it about two decades ago. It has been hit by two large-scale computer system failures and a scandal involving loans to gangster members over the time.

Sato, who became chief in 2011, said he had made efforts to change Mizuho's corporate culture by establishing a clear chain of command, with him as the sole leader of the financial conglomerate with $1.8 trillion in assets.

Speaking at a news conference on Monday, Sato stressed that 58-year old Sakai had been chosen by a nominating committee, made up of independent board members, and that no consideration had been given to which bank he was originally from.

Sakai, in 1984, joined the Industrial Bank of Japan, which later merged with two others to create Mizuho, and became CEO of Mizuho Securities in 2016. Sato was also from the same bank.

However, nobody from the nominating committee was at the news conference to explain their choice. Sato said the bank plans to make public board discussion over Sakai's appointment.

Sakai, whose career at Mizuho includes overseas operations, is taking over at a time when the lender is struggling with low profitability. For the six months ended September, Mizuho was the only among Japan's top three commercial bank groups to post a lower net profit.

Mizuho has said it would reduce 19,000 positions, or a quarter of its total workforce, over the next decade by curbing the number of new hires, and close about a fifth of its 500 domestic locations by the end of March 2025.

"We have a (high) cost structure. Also, I cannot deny that we are a bit conservative in terms of risk taking. We need to change that attitude," Sakai told reporters. ($1 = 110.6100 yen) (Additional reporting by Chris Gallagher and Chang-Ran Kim; Editing by Himani Sarkar)