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Finance

Japan's Mizuho hit by glitch again as branch transactions failed

Brief system outage deals another blow to reputation of third-largest lender

Despite a system overhaul in 2019, Mizuho has been dogged by technological glitches this year.   © Reuters

TOKYO (Reuters) -- Mizuho Financial Group's main banking unit suffered a system glitch that left branches nationwide unable to process transactions on Friday, the latest in a series of embarrassing system errors.

The glitch in Mizuho's core "Minori" banking system prevented in-person transactions on Friday morning, with service mostly restored by 09:50 a.m. local time. Group shares were little changed, down 1%, in line with the benchmark index .

The outage is the latest blow to the reputation of Japan's third-largest lender, which suffered a series of breakdowns between February and March this year despite a $3.6 billion overhaul of its systems in 2019.

That revamp followed two large-scale breakdowns in 2002 and 2011.

The glitch also affected the group's trust bank unit, while automated teller machines (ATMs) and online banking services were unaffected. In-branch services are widely used by Mizuho's older and corporate customers.

"This latest trouble has pushed me towards thinking about closing my account," 41-year-old Mizuho customer Yoshiyuki Sakata told Reuters.

Japanese chief cabinet secretary Katsunobu Kato told a regular news conference that the system glitch was regrettable and that regulators must respond firmly.

"We want Mizuho to restore its system and respond carefully," Finance Minister Taro Aso told reporters. "We have not received any report from Mizuho yet as to how they are dealing with it."

Mizuho is due to hold a news conference at 5 p.m. local time. Its shares have gained 18.6% this year outperforming the Nikkei 225, which is down 1.6%.

A report in June commissioned by Mizuho found that its corporate culture - including an atmosphere where managers are reluctant to express their opinions and unable to respond well to crises - was to blame for its tech problems.

The fresh outage piles further pressure on group CEO Tatsufumi Sakai and banking unit head Koji Fujiwara, who both took temporary pay cuts following the earlier tech trouble.

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