Sumitomo seen seeking capital boost

Sumitomo's move to issue preferred stock would follow Mizuho and a bid to seek capital from Goldman Sachs

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TOKYO, Japan -- Sumitomo Mitsui Financial Group is mulling a move to raise 100 billion yen ($831 million) or more in new capital by issuing preferred stock, according to a report.

The bank group will ask as many as 50 companies from within Japan and overseas to buy its preferred shares, the Asahi Shimbun reported Tuesday.

The newspaper said the company plans to wrap up the fund raising by the end of its financial year in March.

Japan's second-biggest bank would be following in the footsteps of Mizuho Holdings, the biggest, which announced in late January that it will seek a capital boost of around 1 trillion yen ($8.47 billion) by issuing preferred shares.

Sumitomo Mitsui also said in January that it will issue 150 billion yen in preferred stock to U.S. investment bank Goldman Sachs Group.

Sumitomo Mitsui shares ended the morning up 1.3 percent at 390,000, outpacing a 0.35 percent rise in the Nikkei average.

Japan's banks are attempting to generate a more stable capital base as they continue to deal with a mountain of bad loans.

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