SMFG to raise up to $9.7bn in share sale

Sumitomo Mitsui Financial Group (SMFG), Japan's third-largest bank, said it would raise up to $9.7 billion (Dh35.6bn) 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 last month.

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 per cent of current outstanding shares.

Nikko Cordial, Goldman Sachs and Citigroup are the lead underwriters. Sumitomo Mitsui said it expected Goldman Sachs to convert about ¥100bn in preferred shares to common stock as part of efforts to meet stricter capital standards. The Basel Committee, is expected to publish its draft of banking reforms by the month-end.

 

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