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Reports: Nomura Holdings may hunt for new capital
AP - Sunday, November 23
TOKYO - Nomura Holdings Inc., Japan's biggest brokerage, may raise new capital to cushion the blow from the global financial crisis, local media reported Saturday.
The Tokyo-based company is looking to bolster its capital base after spending $2 billion to buy Lehman Brothers' operations in Asia, Europe and the Middle East in September. It also has incurred huge losses from the U.S. financial turmoil.
It will likely issue subordinated loans and other financial products worth hundreds of billions of yen (several billion dollars) to life insurance firms and trading houses, Kyodo News agency said without citing sources.
In the July-September period, Nomura stayed deep in the red for the third straight quarter as deteriorating market conditions, trading losses and real estate write-downs drained its bottom line. Its net loss of 72.9 billion yen ($754.5 million) for the quarter was far worse than analysts were expecting.
Nomura issued a one-line statement Saturday in response to the speculation.
"Nothing has been decided in relation to the news reports concerning our capital policy," it said.
Major Japanese financial firms, which quickly sought to expand their worldwide reach over the last two months, now find themselves hunting for help.
Top Japanese bank Mitsubishi UFJ Financial Group Inc., for example, plans to raise 1 trillion yen ($10.5 billion) by issuing new shares. It invested $9 billion for a 21 percent stake in Morgan Stanley in September and recently completed the purchase of UnionBanCal Corp., now a wholly owned subsidiary.
Rivals Sumitomo Mitsui Financial Group Inc. and Mizuho Financial Group Inc. have also announced plans to raise capital.
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