Sumitomo Trust to raise funds via pref securities
TOKYO, Nov 26 (Reuters) - Sumitomo Trust and Banking (8403.T), Japan's fifth-largest bank, said it plans to raise tens of billions of yen by issuing preferred shares, becoming the latest Japanese lender to shore up its capital amidst the global credit crisis.
Sumitomo Trust is likely to announce the capital raising later on Wednesday, a bank spokesman said, adding that the preferred securities will not be convertible to common shares, thereby avoiding the risk of stock dilution.
The Nikkei newspaper reported on Wednesday the bank was looking to raise about 50 billion yen ($526 million), but the spokesman said the exact figure has yet to be decided.
"It will likely be in the tens of billions," he said.
Once thought to be relatively insulated from the global credit crisis, Japanese banks are now scrambling to raise cash to offset losses on their massive stock portfolios and rising bad-loan costs.
Unlisted Norinchukin Bank plans to bolster its capital base by more than 1 trillion yen due to a sharp drop in the value of its securities holdings, the Nikkei reported on Wednesday. [ID:nT324431]
Shares of Sumitomo Trust were down 3.6 percent at 404 yen as of 0534 GMT, compared with a 2.7 percent drop in Tokyo's index of bank stocks. (Reporting by David Dolan; Editing by Chris Gallagher)
