Tokyo: Mitsubishi UFJ Financial Group Inc,
Japan's biggest banking group, is considering raising up to
one trillion yen to strengthen its capital base through public
offerings of common shares by the end of the year, sources
familiar with the matter said today.
MUFG's move is aimed at enhancing its financial standing
in line with an expected tightening of international
regulations on capital adequacy at banks.
The banking group raised about 400 billion yen by issuing
common shares and some 390 billion yen through preferred
shares by late December last year. The size of the latest
capital boost plan surpasses these earlier rounds of
fundraising.
The capital boost would allow the banking group to funnel
more funds to small and mid-size firms, the sources said,
adding the bank also plans to use the funds to beef up its
overseas businesses such as in Asia.
To ensure the soundness of financial institutions, the
Group of 20 advanced and emerging economies agreed at their
summit in September to tighten regulations on capital bases at
banks in stages by 2012 on the premise of an economic
recovery.
MUFG's capital adequacy ratio stood at 12.96 per cent as
of June 30. The planned global regulations will likely require
that common shares compose more than 4 percent of banks' core
capital.
Bureau Report
First Published: Saturday, November 14, 2009, 16:51