TOKYO, March 8 (Reuters) - Sumitomo Mitsui Trust Holdings Inc, Japan's fifth-largest banking group, said on Friday it will repay 200 billion yen ($2.1 billion) in public bailout money, ending more than a decade of partial government ownership.
The lender, created by a merger of two rivals in 2011, and other Japanese banks received trillions of yen in public money in the late 1990s when they suffered under the weight of bad loans after the burst of the country's asset bubble. Sumitomo Mitsui Trust itself received 1.1 trillion yen in public money in various stages.
Sumitomo Mitsui Trust, helped by a surge in its stock price since late last year, said it will buy back 530 million shares at Friday's closing price of 427 yen per share, totaling 226.3 billion yen. The buyback represents 12.8 percent of its outstanding shares.
The government currently owns about 500 million shares with a book value of 400 yen per share, meaning Sumitomo Mitsui Trust's buyback represents a 6.8 percent premium to the government's holdings.
The bank's shares have soared about 70 percent in the past three months amid the ongoing rally in Japanese stocks on expectations for aggressive economic growth policies by Prime Minister Shinzo Abe.
Prior to the announcement, Sumitomo Mitsui Trust shares closed up 7 percent at 427 yen.
($1 = 94.6650 Japanese yen)
(Reporting by Taiga Uranaka)