Japan's SMFG to issue preference shares

Sumitomo Mitsui Financial Group announced Thursday it will raise $5.84 billion to shore up its tier-1 capital.

The latest capital raising exercise by Sumitomo Mitsui Financial Group SMFG shows that Japanese banks are weak, although for different reasons than their Western counterparts who have been hurt by their exposure to the subprime crisis. Japanese banks are suffering from a slowing economy, narrow interest margins and excessive exposure to the stockmarket. So, like Western banks, they are busy raising capital.

The 538.2 billion $5.84 billion worth of perpetual preference shares SMFG plans...

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