TOKYO Mitsubishi UFJ Financial Group Inc (8306.T) said Takashi Oyamada, chief executive of its core banking unit, would step down for health reasons, disrupting a well-planned succession plan at Japan's largest lender by assets.
Oyamada, 61, took over the helm at Bank of Tokyo-Mitsubishi UFJ (BTMU) in April last year and was widely seen as successor to MUFG CEO Nobuyuki Hirano.
"Oyamada made a very firm request to resign, saying his health conditions were getting worse and could not continue to execute his duty as bank top," Hirano told a news conference announcing the change on Wednesday.
"Oyamada's resignation is affecting our succession plan, which needs to be redrawn," he said.
Oyamada will be replaced by BTMU Deputy President Kanetsugu Mike, 60, effective June 14.
It is rare for Japan's top banks to change chief executives before they serve out their traditional four- to six-year terms.
Oyamada's sudden departure is unlikely to have an immediate impact on MUFG, a financial conglomerate with 300 trillion yen ($2.7 trillion) in assets as CEO Hirano remains in charge.
The surprise move also showed a sign of changing corporate governance at Japan's blue-chip companies, where selection process of top executives often lacked transparency.
MUFG adopted U.S.-style board structure two years ago, giving more power to outside directors, who head board committees.
Hirano said Oyamada first told him about his health problems and concerns about his fitness for the job in February this year.
He said the matter was reported to MUFG's nominating and governance committee, which drew up a contingency plan, picking Mike as successor in March if Oyamada could not continue his job.
Oyamada expressed his desire to resign on Friday last week, Hirano said.
Hirano declined to elaborate on Oyamada's health conditions, saying he is now being hospitalized after doctor's advice.
Mike is a career insider, having joined Mitsubishi Bank in 1979, the same year Oyamada joined the same bank. Mike served as head of MUFG's global business group until this month.
An MBA holder from University of Pennsylvania Wharton School, Mike's past posts include executive chairman at Union Bank of the United States and vice chairman of Thailand's Bank of Ayudhya.
"Our biggest challenges is we cannot achieve sustainable growth with our traditional commercial banking alone," he told the news conference.
An avid kendo player, Mike said he makes 200 practice swings of a wood sword every night.
(Reporting by Taiga Uranaka; Editing by Chris Gallagher and Kim Coghill)