Sumitomo plans to raise up to US$9.7b
By David Dolan |
January 7, 2010, Thursday
|
Print Edition
Print Edition
SUMITOMO Mitsui Financial Group, Japan's third-largest bank, said yesterday it would raise up to US$9.7 billion in a share sale to meet new global regulations and expand overseas.
Sumitomo Mitsui is the latest big Japanese lender to tap a modest stock rebound for much-needed fundraising. Industry leader Mitsubishi UFJ Financial Group raised about 1 trillion yen (US$10.82 billion) last month.
The announcement was widely expected after Reuters reported on Tuesday the bank was planning to raise funds.
In addition to boosting its financial base in response to stricter capital rules, the bank said in a statement it planned to strengthen growth businesses, including its business in Asia and Nikko Cordial Securities' wholesale operations.
The bank said it would issue up to 360 million shares, or 35.4 percent of current outstanding shares.
Sumitomo Mitsui said it expected Goldman Sachs to convert about 100 billion yen in preferred shares to common stock as part of efforts to meet stricter capital standards.
The Basel Committee, made up of central bankers and supervisors from nearly 30 countries, is expected to publish its draft of banking reforms by the end of the month, rules intended to help prevent another financial crisis.
Sumitomo Mitsui's ties to Goldman Sachs date back to the 1980s, when the predecessor of the Japanese bank gave Goldman a US$500 million cash injection.
The Wall Street firm returned the favour in 2003, buying US$1.4 billion of Sumitomo Mitsui's preferred shares at the height of Japan's banking crisis.
Sumitomo Mitsui is the latest big Japanese lender to tap a modest stock rebound for much-needed fundraising. Industry leader Mitsubishi UFJ Financial Group raised about 1 trillion yen (US$10.82 billion) last month.
The announcement was widely expected after Reuters reported on Tuesday the bank was planning to raise funds.
In addition to boosting its financial base in response to stricter capital rules, the bank said in a statement it planned to strengthen growth businesses, including its business in Asia and Nikko Cordial Securities' wholesale operations.
The bank said it would issue up to 360 million shares, or 35.4 percent of current outstanding shares.
Sumitomo Mitsui said it expected Goldman Sachs to convert about 100 billion yen in preferred shares to common stock as part of efforts to meet stricter capital standards.
The Basel Committee, made up of central bankers and supervisors from nearly 30 countries, is expected to publish its draft of banking reforms by the end of the month, rules intended to help prevent another financial crisis.
Sumitomo Mitsui's ties to Goldman Sachs date back to the 1980s, when the predecessor of the Japanese bank gave Goldman a US$500 million cash injection.
The Wall Street firm returned the favour in 2003, buying US$1.4 billion of Sumitomo Mitsui's preferred shares at the height of Japan's banking crisis.
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