More Japanese banks to be verified in yakuza loans issue

6 years ago by in Business, Japan

Japan’s Financial Services Agency (FSA) will verify next week if all three of the country’s big banks, including top lender Mitsubishi UFJ Financial Group made financial operations with the mafia members of yakuza.

The issue started at the end of September when Japan’s second-largest bank by assets was inspected by Japan’s Financial Services Agency and had to clean up its operations.

Mizuho Bank loaned over Y200 million ($2 million) to organized crime groups during 230 transactions.

A group of 54 current and former executives were punished for giving loans to gangsters, but a third-party panel found no sign of a deliberate cover-up, said Japan’s Mizuho Financial Group.

“I offer my sincere apologies for causing great trouble,” Mizuho Bank president Yasuhiko Sato said, adding that the bank’s board “deeply regrets” not doing enough to identify the “antisocial” groups from among its clients.

Mitsubishi UFJ (MUFG), Mizuho and Sumitomo Mitsui Financial Group Inc (SMFG) were noticed on Tuesday of the inspections, the head of FSA investigation unit said.

The inspectors will verify if the banks had dealings with the yakuza members and will focus as well on compliance practices and risk management systems, according to the FSA officials.