| Katsuyuki Sugita | ||||||
In early May, Katsuyuki Sugita, president of Dai-Ichi Kangyo Bank (DKB) and co-CEO of the newly created Mizuho Bank, returned to duty from sick leave. He made all the right noises to staff that he was fighting fit – “full of power and energy” – and ready to play a full part in the next stage of the merger of DKB, Fuji Bank and Industrial Bank of Japan (IBJ).
But insiders fear that Sugita’s sickness will make the infighting for top jobs in Mizuho the more intense. A suspicious Mizuho spokesman asks how Euromoney has heard of Sugita’s illness, before describing it as cystic duct narrowing. Rumours persist of an even more serious condition.
Until now, it was widely assumed that Sugita would become the head of the Mizuho holding company, leaving the president of IBJ, Masao Nishimura, to head the corporate bank and Yoshiro Yamamoto, president of Fuji Bank, to take charge of the commercial bank – a neat division of the spoils.
There are doubts now about whether Sugita will be fit enough to do the top job and even more uncertainty about who will take over if he can’t. “Frankly, we don’t rate Mr Sugita’s deputy at DKB, Toshikuni Nishinohara,” adds a senior insider. “Mr Sugita has a broad understanding, not just of the merger and the banking scene generally, but also of the economy as a whole. He is a serious person.” On the other hand, the insider continues, “Mr Nishinohara takes a narrow view, looking mainly at things from DKB’s perspective.”
This executive suggests that more than 30 years after the merger of Dai-Ichi Bank and Nippon Kangyo to form DKB, that bank is still split by the divergent loyalties of the original partners. “Mr Sugita is a K-man, but Mr Nishinohara is a D-man, and so are most of the other senior people,” he says. “In fact, I would say that Mr Nishinohara’s vision is still one Dai-Ichi Bank, after more than 30 years. It is not a good advertisement for the merger of the three banks to form the world’s biggest bank.”
That’s why he is relieved that Sugita is back to take the reins again. “There has been a struggle for who is going to get the jobs and to decide the shape of Mizuho, particularly between DKB and Fuji. For a time, with Mr Sugita out of action, the balance of power swung towards Fuji. Probably when the financial results are out this month, Fuji will lose some influence because we are expecting poor results. So it is good that Mr Sugita is in the office.”
But what if Sugita’s health does not permit him to take the job of running the holding company in October when the merger is supposed to be completed? IBJ executives regard their president as the strongest leader, but their main interest so far has been to dominate the corporate bank. Fuji lacks the clout to be able to run the merged entity. “Even in discussions with the financial authorities, Fuji does not have the power to argue and accepts 95% of what they say. There is a big problem balancing the jobs between the three partners,” admits another insider.
