The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.
Banking

Japan: Megabanks to issue shares... again

Reluctant investors under pressure to buy, while bookrunners await fee bonanza; Analysts say extra capital will not solve banks’ inherent problems

Japan’s three largest financial groups are likely to raise fresh capital as soon as they can, according to analysts and investment bankers close to the firms. There are concerns over their low tier 1 capital ratios relative to their global peers and the coming proposals of the Basel Committee on bank capital.

Mitsubishi UFJ Financial Group, the largest financial conglomerate in Japan, filed a registration on November 18 for up to ¥1 trillion worth of new stock to be issued within the next year.

The other two megabanks, Sumitomo Mitsui Financial Group and Mizuho Financial Group, are restricted from selling further stock until December and January 2010 respectively under the terms of their most recent equity issuances earlier this year. SMFG raised $9 billion in June, while Mizuho FG raised $5.9 billion in July. Though no official comment has been made by either firm about new equity raising, bank analysts agree that calling on investors for more cash as soon as they are able represents the most likely course of action as banks look to bolster weak core capital reserves.

Despite having raised just under $20 billion in equity between them in the last year, the three megabanks need more cash ahead of Basel II coming into force because of the nature of Japanese banks’ capital bases.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree