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Report: Higashi-Nippon Bank chairman to resign following lending misconduct


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Report: Higashi-Nippon Bank chairman to resign following lending misconduct

Michito Ishii will resign as chairman of Higashi-Nippon Bank Ltd. following revelations that the company had engaged in lending misconduct, Tokyo's The Nikkei reported.

The departure is part of the bank's remedial plan to be submitted to the Financial Services Agency by Aug. 13, the report said. The plan would also include Ishii and other officials returning part of their salaries.

In July, the financial watchdog found the company to have loaned more money than customers needed and had them deposit part of the money at the bank, allowing Higashi-Nippon Bank to earn interest on the money kept at the bank, effectively without lending it.

The lender was then issued a business improvement order by the regulator, directing it to reform its internal control structure and determine management responsibility for the lapses.

Higashi-Nippon Bank said its branches at 69 locations charged a total of about US$4.15 million in loan fees that were not clear or explained to customers, according to the report. The total excess loans given to customers amounted to approximately US$35 million.

Ishii's resignation is scheduled to be unveiled as early as Aug. 10, the publication said.