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Japan's MUFG aims for $12 bln December share issue
AFP - Tuesday, December 1
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Japan's MUFG aims for $12 bln December share issue
Slideshow: Full Photo Coverage: Business & Economy
TOKYO (AFP) - – Japan's top bank Mitsubishi UFJ Financial said Monday it aims to raise almost 12 billion dollars in fresh capital in December in a bid to bolster its capital ravaged by the financial crisis.
MUFG said it plans to raise 1.056 trillion yen (12.18 billion dollars) by issuing 2.34 billion new shares, with the price to be fixed between December 14 and 16. The shares are set to be sold on markets the following day, it said.
The share issue, the largest ever by a Japanese financial institution, was announced earlier this month, but the lender had marked the date within a one-year time frame until November 2010.
"In view of changes in global regulations and the competitive environment, the (issuance) aims to secure strong finances in order to have a stable financial supply and contribute to the broader economy," the statement said.
The move would be the bank's fourth since the financial meltdown late last year. Including the recent announcement, MUFG will have raised a total of 2.5 trillion yen (28.8 billion dollars).
While Japan's top banks were less affected than many of their Western peers by the financial crisis, they have not been immune to the market turmoil, largely due to their big stock portfolios.
The financing comes as regulators are calling on lenders to improve their capital requirements to cover their exposure from their trading and investments, and protect against the risks of default.
Credit ratings agency Standard & Poor's last week warned that major global banks had insufficient capital, citing Mitsubishi as among those with the weakest defences.
The bank reported net profit soared 53.2 percent in the six months to September from a year earlier to 140.95 billion yen (1.6 billion dollars).
Based on the bank's current market capitalisation, the sale would be equivalent to 17.5 percent of its outstanding shares.
Shares of MUFG closed 8.56 percent higher to 482 yen in Tokyo Monday before the sale announcement was made.
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