Japan's Sumitomo Mitsui to raise 5.8 bn dollars

TOKYO: Japan's third largest bank, Sumitomo Mitsui Financial Group, said Thursday that it would raise 5.8 billion dollars from investors to shore up its finances during the economic crisis. Sumitomo Mitsui said it would sell preferred securities worth 538.2 billion yen to domestic institutional investors.

The securities, which will be issued through a special purpose company in the Cayman Islands next week, will not be convertible into common stock. Separately Japan's top broker Nomura Holdings said it would raise 300 billion yen by selling bonds.

The move aims to top up Nomura's operating funds in the Asia-Pacific and Europe following its acquisition of parts of failed Wall Street giant Lehman Brothers. Japanese financial giants have been relatively resilient to the global credit crunch that has pushed banks worldwide to the brink of bankruptcy, but they are now being squeezed by weak markets and a Japanese recession.

Banks are also facing increased demand for loans from companies that are finding it tougher to raise funds themselves on shaky financial markets. Japan's biggest bank Mitsubishi UFJ Financial is tapping investors for up to 10.5 billion dollars, while number two Mizuho Financial is seeking to raise up to about three billion dollars to bolster its finances.