JAPAN'S Mizuho Bank is under pressure for lending money to yakuza gang members in a practice that experts say is likely to have occurred at other leading Japanese financial houses.
Mizuho, which has an operation in Australia, is facing action from financial regulators in Japan after revelations its consumer finance arm extended loans to organised crime figures.
The bank's president, Yasuhiro Sato, is under heavy pressure after he was forced to correct his claim in a press conference this week that the board was not aware of the yakuza loans.
The loans -- thought to total about $US2 million ($2.1m) -- were issued to people believed to be on a list of known gang members through Mizuho's personal loan subsidiary, Orient Corporation, or Orico.
Japan's Financial Services Agency has demanded an explanation and Sato has been forced into a grovelling public apology after it emerged the issue was raised in papers distributed at board meetings.
The scandal is confined to Mizuho in Japan and has no links to its overseas operations, including its corporate banking arm in Australia.
Tokyo-based businessman Miro Mijatovic, once the victim of one of their extortion attempts, said it would be "inconceivable" that the same issue was not occurring at other major Japanese banks.
He said most Japanese banks acquired personal loan companies about 10 years ago to boost flagging profit growth.
"Most of the companies had dodgy backgrounds -- loan sharks basically. The big banks bought them out," he said.
"The loans in question are not big amounts. They are like car loans basically. But with the new rules against gangs the banks now have a list of people they should not be dealing with. They knew about this right up to the board level. It's a direct breach of the anti-yakuza ordinances."
Why the yakuza obtained the loans has not been made clear. Mijatovic said they needed capital just like other businesses.
