Friday May 15, 07:19 AM
Japan's Mizuho Financial to raise $8.3 bln: reports
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TOKYO (AFP) - Japan's second-largest bank Mizuho Financial Group Inc. plans to raise 8.3 billion dollars by issuing new shares and securities to cope with the global financial crisis, according to reports.
Mizuho is finalising plans to raise around 800 billion yen (8.3 billion dollars), with 600 billion yen likely coming from a common stock issuance, the Nikkei (news) economic daily and Jiji Press news agency said.
The capital boost is likely to be conducted by the end of September, the daily said.
Mizuho, which is to announce earnings results for the past financial year later Friday, declined to comment on the reports.
Japan's top banks were initially seen as relatively immune to a US-born credit crunch, but they have been badly burned by the financial crisis, partly because they have a large exposure to the stock market.
Mizuho last month estimated its net loss at 580 billion yen for the year to March. The previous year it had logged positive earnings of 311.2 billion yen.
The group blamed the much worse than expected performance on increased losses related to weak financial markets as well as the impact of low interest rates and rising bad loan costs.
Other Japanese banking giants have also raised or plan to raise cash to enhance their capital bases.
The Nikkei said the quality of the capital bases at major Japanese banks has come under increasing scrutiny since Washington's "stress tests", which showed that 10 big US banks need a total of 74.6 billion dollars in extra capital.
Under the mountain of bad loans, Mizuho raised one trillion yen in early 2003 by issuing to business partners preferred stock with no voting rights.
Mizuho shares gained 0.43 percent to 233 yen on the Tokyo Stock Exchange by noon on Friday, lagging behind a 1.66 percent rise in the benchmark Nikkei index, amid worries the reported share issue would dilute the stock's value.
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