UPDATE 1-MUFG shares fall nearly 5 pct on share issue plan

* MUFG shares decline on record Japan fundraising plan

* Rivals Mizuho, SMFG also decline

* Japan banks seen raising capital to meet strict regulations

TOKYO, Nov 16 (Reuters) - Shares of Mitsubishi UFJ Financial Group (8306.T) fell almost 5 percent on Monday, after sources said Japan's largest bank would issue up to 1 trillion yen ($11.2 billion) in new shares by the end of this year. [ID:nT142551]

The common share issue would be a record for a Japanese financial firm, according to Thomson Reuters data. It is also likely to spark concern that smaller rivals Mizuho Financial Group and Sumitomo Mitsui Financial Group will eventually follow suit.

Shares of both banks followed Mitsubishi UFJ lower, even though they posted consensus-beating quarterly results on Friday. [ID:nSP42968]

Japanese banks have already raised $15 billion this year by issuing common shares, but analysts have said they will need billions more as regulators around the world plan new rules requiring banks to hold more capital.

In the past, Japanese banks have raised funds by issuing preferred securities and preferred shares, neither of which are likely to meet the coming changes in regulation.

As such, Goldman Sachs has estimated that Mizuho may need to raise anything from 170 billion yen to 1.9 trillion yen, and that Sumitomo Mitsui may need 834 billion yen. [ID:nT306019]

Mitsubishi UFJ's shares were down 4.7 percent at 484 yen as of 0048 GMT. Mizuho fell 2.2 percent and Sumitomo Mitsui fell 3.4 percent. (Reporting by David Dolan; Editing by Hugh Lawson)