(Bloomberg) — Mizuho Financial Group Inc. Chief Executive Officer Tatsufumi Sakai is planning to step down following multiple technical failures that drew criticism from the government, according to people with knowledge of the matter.

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The bank will release an improvement plan in December, which will include details of the CEO’s resignation, other people said, asking not to be identified because the matter is private. Mizuho board’s nominating committee will meet to choose Sakai’s successor and Chairman Yasuhiro Sato may also leave, they said.

Nikkei, Kyodo and NHK all reported earlier that Sakai is likely to step down, without saying where they got the information. Mizuho spokesman Yasuhiro Sasaki said nothing has been decided on any management changes.

Tokyo-based Mizuho has been dogged by major IT troubles since it was created from the merger of three banks more than 20 years ago. Its retail arm has had series of system failures since February. Similar outages happened in 2002 and 2011, causing delays in millions of transactions and prompting Japan’s Financial Services Agency to issue business improvement orders.

Mizuho’s management has come under increasing pressure from outages that disrupted services for customers this year. Sakai, who became CEO in 2018, has been trying to reshape the bank, which has long been criticized for a bloated cost structure and internal division stemming from the merger.

Sakai refrained from becoming chairman of the Japanese Bankers Association on April 1 to focus on addressing the system glitches. The position is normally rotated annually among the nation’s three biggest banks.

In June, Mizuho said its top executives would take pay cuts after a panel found that management lapses contributed to the ATM failures. Sakai’s salary was reduced for six months.

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The FSA is preparing another business improvement order for the bank tied to the glitches, a person with knowledge of the matter said. The FSA issued such an order in September requiring the bank to review system upgrades. The regulator was expected to take more administrative action after finishing a probe into Mizuho that began earlier this year.

Shares of Mizuho closed down 1.9% in Tokyo, paring this year’s gain to 12%. The stock has underperformed larger rivals Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. this year, as the lenders recover from the pandemic by reducing provisions for bad loans.

Overseas Remittances

The FSA will give the results of its probe to Mizuho as soon as next week and will tell the bank that it violated rules on overseas remittances at the time of one of the eight system troubles it suffered this year, the people said. Nikkei earlier reported that delays stemming from the glitches caused the bank to skip necessary processes to check the transactions.

Mizuho’s handling of the system failures indicates that it still has unsolved issues on governance and corporate culture, FSA officials have said. The regulator has been interviewing dozens of senior Mizuho officials as part of its months-long inspection on the bank.

In one glitch in August, all 460 Mizuho Bank branches nationwide were unable to process transactions for about an hour. The Tokyo-based bank said backup hardware failed when the servers connecting the branches broke down.

“We have caused troubles for customers repeatedly, and it could lead to customer anxiety in doing transactions with us,” Sakai said at the time. “We are taking it very gravely.”

In February, ATMs swallowed more than 5,000 cash cards and passbooks, and a month later a hardware failure caused a delay in 300 foreign-currency money transfers.

(Updates with details in second and tenth paragraphs.)

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