MUFG eyes 1 tril. yen capital boost via public offerings+

TOKYO, Nov. 14 Kyodo -
Mitsubishi UFJ Financial Group Inc., Japan's biggest banking group, is
considering raising up to 1 trillion yen to strengthen its capital base through
public offerings of common shares by the end of the year, sources familiar with
the matter said Saturday.

MUFG's move is aimed at enhancing its financial standing in line with an
expected tightening of international regulations on capital adequacy at banks.
The banking group raised about 400 billion yen by issuing common shares and
some 390 billion yen through preferred shares by late December last year. The
size of the latest capital boost plan surpasses these earlier rounds of
fundraising.
The capital boost would allow the banking group to funnel more funds to small
and midsize firms, the sources said, adding the bank also plans to use the
funds to beef up its overseas businesses such as in Asia.
To ensure the soundness of financial institutions, the Group of 20 advanced and
emerging economies agreed at their summit in September to tighten regulations
on capital bases at banks in stages by 2012 on the premise of an economic
recovery.
MUFG's capital adequacy ratio stood at 12.96 percent as of June 30. The planned
global regulations will likely require that common shares compose more than 4
percent of banks' core capital.
MUFG's ratio of common shares in its core capital came to 5.76 percent at the
end of June. A capital increase of 1 trillion yen is expected to raise both
ratios by around 1 percentage point, the sources said.
Other Japanese megabank groups are also stepping up their efforts to boost
their capital bases. Sumitomo Mitsui Financial Group Inc. raised about 861
billion yen to boost its capital base and Mizuho Financial Group Inc. some 529
billion yen, both through common shares.
==Kyodo
2009-11-14 21:55:15