TOKYO (Reuters) - Nomura Holdings Inc (8604.T) said it would raise up to 511 billion yen ($5.6 billion) in its second share sale since buying Lehman's Asian and European operations, targeting investments and tighter capital requirements.
Shares in Japan's largest brokerage (NMR.N) fell about 14.5 percent in early New York trading on Thursday. The announcement came after the close in Tokyo.
Nomura said it would use the cash to invest and extend loans to subsidiaries in Asia, Europe and the United States, as well as bolster its capital, eyeing a global regulatory push for banks to have bigger capital buffers to prevent another crisis.
"In addition to strengthening our global business base, the capital raising is intended to respond to recent regulatory moves to tighten capital requirements for global financial institutions," spokesman Kenji Yamashita said.
Nomura, which raised 280 billion yen in March in its first share offering in two decades, said in a statement that it would offer common stock roughly equally to Japanese and overseas investors.
The G20 grouping of rich and developing countries, set to meet in Pittsburgh on Thursday, has been pushing for global banks to boost their capital, in particular calling for issues of common shares.
Nomura's offering, which would boost the number of its outstanding shares by about 30 percent, could signal another round of fundraising by Japanese banks, an analyst said.
The issue will bolster Nomura's core tier 1 capital by up to 5 percentage points, Yamashita said. Nomura's tier 1 ratio stood at 12.7 as of the end of June.
"If this materializes, the size is a big surprise, and also the timing, as they have just completed a round of fundraising," said Masahiko Watanabe, a credit analyst at Fitch Ratings.
"If it is true that they want to use the capital to meet potential changes in global capital requirements, this could have an impact on other Japanese banks."
Nomura lost about $7 billion in the past business year, hit by costs to retain staff and integrate the Lehman operations it bought after the Wall Street bank failed last year.
Nomura was also burned by trading losses and exposure to both Iceland and swindler Bernard Madoff.
The Japanese broker returned to profit in the April-June period after six quarters of losses, as it started to get a handle on Lehman assets and cashed in on revived equity markets.
Prior to Thursday's announcement, Nomura closed down 1.6 percent at 681 yen in Tokyo, giving it a market value of about $21 billion.
(Additional reporting by Taiga Uranaka, Emi Emoto, Taro Fuse and Nathan Layne in Tokyo, and Chris Sanders in New York; Editing by Dan Lalor)
$1 = 90.84 yen