UPDATE 1-Japan's Mizuho likely to escape serious penalty over mob loans

The Financial Services Agency ordered Mizuho to improve business practices after the bank did almost nothing about the mob lending for more than two years.Mizuho initially said that knowledge of the loans went only as far as the bank's compliance officers, but days later the bank acknowledged that the transactions had been reported to top officials,Fashion Dresses including Sato, at board meetings.Based on the panel's finding that Mizuho did not intentionally deceive the FSA, the bank hopes to move beyond the scandal, but the pressure may not abate quickly. Some members of parliament have called for Sato to testify on the affair and, people familiar with the matter say, the FSA is under pressure to appear tough as Fashion Dresses questions arise over why it did not uncover the shady loans earlier.

Finance Minister Taro Aso, who heads the FSA, said on Friday the regulator would decide what action to take based on Monday's panel report.More than 30 executives will take pay cuts, and Mizuho will ask about a dozen former executives to return some of their compensation, Japanese media said.The scandal, in addition to highlighting the pervasive reach of "yakuza" crime syndicates Fashion Dresses and other underworld elements throughout Japan Inc, highlighted the lapses in corporate governance that Sato himself has been struggling to fix.The bank, 13 years after its formation in a merger during Japan's financial crisis, remains riven by factions associated with its legacy banks: the Industrial Bank of Japan, Dai-Ichi Kangyo Bank and Fuji Bank.

The tussling fiefdoms have fostered a culture of protecting turf and refraining from taking broad responsibility for problems, Mizuho bankers say.As a result of this disunity and other factors, the company has failed to match its main competitors, Mitsubishi UFJ Financial Group and Sumitomo Mitsui Financial Group ,Fashion Dresses in key measures of profitability.Mizuho is trying to expand its loan business globally but it was left out earlier this year when the other two megabanks took major steps to expand in Southeast Asia.MUFG, Japan's largest lender, in July agreed to buy up to 75 percent of Bank of Ayudhya Pcl, Thailand's fifth-largest lender, in a deal worth $5.6 billion. In May SMFG agreed to buy an up to 40 percent stake in BTPN, an Indonesian lender backed by TPG Capital.

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