MIZUHO Financial Group, Inc. was hit by another system glitch, even as it prepared to appoint an insider as its next chief executive officer (CEO)to steer Japan’s third-largest banking group back from a series of technical problems.

Core lending unit Mizuho Bank Ltd. said on Tuesday that it was having problems with its corporate internet banking system. While the glitch was later resolved, it came after a series of system disruptions in the past year which have prompted rebukes from regulators and forced current CEO Tatsufumi Sakai to announce in November that he would step down.

The bank is set to name career executive Masahiro Kihara as his successor at a board meeting on Jan. 17, and he is due to take office on April 1, according to people with knowledge of the plans. They asked not to be identified as the matter wasn’t public.

Yasuhiro Sasaki, a spokesman for Mizuho, said no decision had yet been made. The plans were first reported by the Nikkei newspaper.

The next CEO’s “immediate challenge is to take all the needed steps to start recovering the confidence of regulators and the public, that Mizuho won’t have more systems troubles in the future, after so many failures in the past,” said Michael Makdad, an analyst at Morningstar, Inc. in Tokyo.

Highlighting the challenges for Kihara, Tuesday’s disruption triggered a new reprimand from the government.

“It’s extremely regrettable to have systems trouble,” Finance Minister Shunichi Suzuki told reporters. “Banks are key social infrastructure.” The bank said the outage has been resolved.

Mr. Kihara, 56, is a senior executive officer and head of the global products unit, which handles investment banking businesses such as syndicated loans, bond issues and mergers advice. A career insider, he joined what is today’s Mizuho in 1989 and has also had stints in areas including risk management and finance.

He is the older brother of Seiji Kihara, Japan’s Deputy Chief Cabinet Secretary and a close aide of Prime Minister Fumio Kishida.

Toyoki Sameshima, an analyst at SBI Securities Co., focused on Mr. Kihara’s relative youth.

“He could reinvigorate the organization,” Sameshima said, adding that he hadn’t verified the reports himself. He also said that there had been some speculation that the bank may hire an outsider.

In the business order, Japan’s Financial Services Agency criticized Mizuho’s corporate culture and weak governance, saying it has failed to learn from the past incidents.

The latest series of glitches started in February, when ATMs swallowed more than 5,000 cash cards and passbooks. A month later, a hardware failure caused a delay in 300 foreign-currency money transfers. By the time Mr. Sakai announced his planned departure, there had been eight such incidents since the beginning of 2021.

The smallest of Japan’s three megabanks, Mizuho has also been struggling to catch up with bigger rivals that have made bold bets to expand beyond traditional lending into investment banking and wealth management.

Sumitomo Mitsui Financial Group, Inc. last year spent more than $3.3 billion on deals in its Asia push. Mitsubishi UFJ Financial Group, Inc. agreed to sell MUFG Union Bank in the US and will use freed-up capital for growth areas such as digital and asset management businesses.

Mizuho has also been diversifying. In its latest move, the bank agreed to buy US-based Capstone Partners to expand in the business of helping private equity firms raise funds. The deal is slated to be completed in the first half of the year, the bank said in a statement on Monday. — Bloomberg

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