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Bank SMFG plans $2.5B share issue
TOKYO, Japan -- Sumitomo Mitsui Financial Group, Japan's second-largest banking group, said Monday it plans to issue an additional 300 billion yen ($2.5 billion) in preferred shares to overseas investors. SMFG said it plans to set up an overseas special-purpose vehicle (SPV) to issue 100,000 preferred shares at 3 million yen each. The planned boost to the bank's capital increase follows its announcement last month that it would issue 150.8 billion yen ($1.25 billion) in preferred shares to the U.S. investment bank Goldman Sachs Group. Shares in SMFG are trading 4.47 percent lower at 385,000 yen Monday morning. The broader market, measured by the Nikkei 225 average, is 0.81 percent higher at 8,772.09.. SMFG did not say which overseas investors would buy the shares. Closing the booksSMFG's capital boost is the latest in a series of plans announced by Japan's biggest banks to increase their capital ahead of book-closing for the end of the financial year on March 31, when banks are expected to incur losses from loan charges. The business daily Nihon Keizai Shimbun said it estimates that Japan's top five banking groups plan to raise about 2.1 trillion yen in new shares to fortify their balance sheets. Lead managers for the new share issue are Daiwa Securities, Goldman Sachs and JP Morgan. Reuters contributed to this report.
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