Nomura plans $5.6 bn share sale, second post-Lehman

Nomura plans $5.6 bn share sale, second post-Lehman

Tokyo: Nomura Holdings said it would raise up to $5.6 billion in its second share sale since it bought the European and Asian operations of failed investment bank Lehman Brothers.

Japan’s largest brokerage said it would use the funds for investments and loans to its subsidiaries in Asia, Europe and the US as well as to meet expected regulatory changes amid a move globally to push banks to bolster their capital.

“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," said Nomura spokesman Kenji Yamashita.

Nomura, which raised 280 billion yen earlier this year in its first share offering in two decades, said in a filing notice to Japan’s financial regulator it would raise up to 511 billion yen in an offering of 400 million common shares overseas and an undisclosed number of shares in Japan.

The offering comes as the G-20 grouping of rich and developing countries pushes for stronger capital ratios for banks to avoid another financial crisis. In particular, the G20 wants global banks to build extra buffers in the form of common stock.

The leaders of the G-20 countries are meeting on Thursday and Friday in Pittsburgh.

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.

“If this materialises, 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 in Tokyo.

“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 fell deep into the red in the past business year as it absorbed heavy costs for the Lehman acquisitions, and after it suffered big trading losses and exposure to losses in Iceland and from swindler Bernard Madoff.

Nomura only returned to profit in its most recently quarterly results for April-June, after six quarters of losses, as it started to benefit from its purchase of Lehman assets in Asia, Europe and the Middle East.