Sumitomo Mitsui Financial Group, Japan's third-largest bank, set its planned share sale at $9.4 billion on Monday, a record for a Japanese financial firm and driven by the recent rebound in global financial stocks. The strong demand from domestic and overseas investors may also be an endorsement of the bank's aggressive attempt to grab market share at home by strengthening its securities business.
Sumitomo Mitsui in May made a winning bid for Citigroup's Inc Japanese brokerage. Shares of Japanese banks have risen about 45 percent in the last three months, recouping some losses from a six-year low earlier this year, as investors bet the worst of the financial crisis may be over.
"We're no longer at the stage where we don't know how bad the financial crisis will get," said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management in Tokyo. "Investors are also responding well to the fact that Sumitomo Mitsui now has a powerful brokerage within its group. That is looking more and more positive as the stock market rebounds."
Sumitomo Mitsui said it will raise 923.1 billion yen ($9.4 billion) by issuing new common shares, a record for a Japanese financial firm, according to Thomson Reuters data. The lender said in a statement it plans to sell 235 million shares at 3,928 yen each, a 9.7 percent discount to their closing price of 4,350 yen on Friday. A spokesman for the bank said it expected its net fundraising to total 885 billion yen after fees.