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26761
Mon, 10/27/2008 - 09:44
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https://oananews.org//node/26761
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MUFG eyeing up to 1 tril. yen capital increase amid stock plunge
TOKYO, Oct. 26 Kyodo -
Mitsubishi UFJ Financial Group Inc. is considering raising up to 1 trillion yen in new capital by the end of March to shore up its capital base amid sharp falls in the prices of its stockholdings amid the global financial upheaval, sources close to the matter said Sunday.
MUFG is planning to raise fresh funds by issuing preferred and common shares,
the sources said, adding it will finalize the specific amount of funds to be
newly raised and the timing after scrutinizing stock market movements and other
factors.
In the face of recent plunges in global stock markets, Mizuho Financial Group
Inc. and Sumitomo Mitsui Financial Group Inc. are also contemplating
large-scale capital increases, the sources said.
With MUFG's move, all three of Japan's mega-banking groups are poised to
reinforce their capital bases to prevent their capital adequacy ratios falling,
observers said.
The plan to boost its capital base comes after MUFG announced earlier this
month that it had bought a 21 percent stake on a fully diluted basis in
troubled U.S. investment bank Morgan Stanley for $9 billion after making
revisions to the terms of the acquisition.
MUFG has made a handsome amount of investments since August to turn its
California-based subsidiary UnionBanCal Corp. into a wholly owned unit and
Japanese consumer loan lender Acom Co. into a subsidiary.
The envisioned capital increase is partly aimed at supplementing recent huge
investments totaling 1 trillion and several hundred billion yen, the sources
said.
The capital increase scheme also comes at a time when MUFG is considering
lowering its mid-term consolidated net profit projection due to rising costs
associated with the disposal of bad loans and the dwindling value of its
shareholdings.
As of August, MUFG was forecasting a group net profit of 270 billion yen for
the April-September period but it is expected to slash the figure to well under
200 billion yen, according to informed sources.
The banking group will also likely cut its estimate for group net profit for
the whole of fiscal 2008 through March 2009 from an earlier forecast of 640
billion yen, they added.
==Kyodo
Mitsubishi UFJ Financial Group Inc. is considering raising up to 1 trillion yen in new capital by the end of March to shore up its capital base amid sharp falls in the prices of its stockholdings amid the global financial upheaval, sources close to the matter said Sunday.
MUFG is planning to raise fresh funds by issuing preferred and common shares,
the sources said, adding it will finalize the specific amount of funds to be
newly raised and the timing after scrutinizing stock market movements and other
factors.
In the face of recent plunges in global stock markets, Mizuho Financial Group
Inc. and Sumitomo Mitsui Financial Group Inc. are also contemplating
large-scale capital increases, the sources said.
With MUFG's move, all three of Japan's mega-banking groups are poised to
reinforce their capital bases to prevent their capital adequacy ratios falling,
observers said.
The plan to boost its capital base comes after MUFG announced earlier this
month that it had bought a 21 percent stake on a fully diluted basis in
troubled U.S. investment bank Morgan Stanley for $9 billion after making
revisions to the terms of the acquisition.
MUFG has made a handsome amount of investments since August to turn its
California-based subsidiary UnionBanCal Corp. into a wholly owned unit and
Japanese consumer loan lender Acom Co. into a subsidiary.
The envisioned capital increase is partly aimed at supplementing recent huge
investments totaling 1 trillion and several hundred billion yen, the sources
said.
The capital increase scheme also comes at a time when MUFG is considering
lowering its mid-term consolidated net profit projection due to rising costs
associated with the disposal of bad loans and the dwindling value of its
shareholdings.
As of August, MUFG was forecasting a group net profit of 270 billion yen for
the April-September period but it is expected to slash the figure to well under
200 billion yen, according to informed sources.
The banking group will also likely cut its estimate for group net profit for
the whole of fiscal 2008 through March 2009 from an earlier forecast of 640
billion yen, they added.
==Kyodo
