Nomura seeks ¥302bn in new capital to shore up balance sheet
Nomura, Japan’s biggest brokerage, has announced plans to raise up to ¥302bn (£2.19bn) in new capital to shore up a balance sheet weakened by losses from the financial turmoil.
The bank said yesterday that it would sell up to 375 million shares overseas and 341.4 million in Japan in its first sale of ordinary stock for 20 years.
Nomura had to act to strengthen its capital buffer after four straight losses and the purchase of Lehman Brothers’ European business undermined confidence in the bank’s financial position.
Nomura last month unveiled a record ¥343bn net loss for the third quarter of 2008 as it was hit by exposures to Iceland, Bernard Madoff and the cost of the Lehman deal.
When Nomura bought the Lehman business five months ago it said it had avoided the mistakes made by US banks. But it was unable to avoid fall-out from the severe market dislocation at the end of last year.
The bank has also had to lay out large sums to retain Lehman bankers, though insiders say the deal is now starting to pay off with healthy volumes of business coming through the door.
Nomura shares rose 3.1 per cent yesterday but have fallen 36 per cent this year.
Analysts said the bank needed to act to announce the capital raising to help stem the falls in its share price.
Japan’s banks missed out on the worst of the credit market turmoil that wrecked Lehman but they have been lining up to raise capital in recent weeks. Mitsubishi UFJ Financial, the country’s biggest public bank, raised $4.5bn (£3.1bn) in December, and its rival, Mizuho Financial, announced an $850m capital raising yesterday on top of $3.8bn in December.
The stock sale will dilute Nomura’s existing shares by 36 per cent. The estimate for the value of the share sale was based on its closing share price last Thursday.
The company said that the selling price would be set between 9 March and 11 March. Nomura had initially signalled that it would raise up to ¥300bn, but yesterday’s announcement included a provision for it to raise as much as ¥302bn if there was enough demand for the new shares.
In the third quarter, Nomura booked a ¥32.3bn loss linked to Mr Madoff’s alleged $50bn investment fraud, a ¥41.3bn loss on Icelandic bank bonds, and ¥60.3bn of costs related to the Lehman acquisition.
- 1 Frank Lampard's face drops when Holly Willoughby introduces him as a 'Man City legend'
- 2 'Do not give them a reason': Baltimore man divides police and rioters in hope of avoiding violence
- 3 X Factor in crisis as numbers of people auditioning plummets
- 4 Baltimore riots: Furious mother marches her son home live on TV
- 5 General Election 2015: Stephen Hawking says he will vote Labour
General Election 2015: Tories suspend candidate who said she would never support 'the Jew' Ed Miliband
Bali Nine executions: Indonesia confirms killings of Andrew Chan and Myuran Sukumaran will go ahead
The four utterly contradictory polls that tell the story of this election and why it is pointless trying to predict the outcome
General Election 2015: Prospect of Labour-SNP coalition makes one in four voters less likely to support Ed Miliband, says survey
Baltimore riots: Furious mother marches her son home live on TV
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Aaron and Melissa Klein: Oregon anti-gay bakers ordered to pay $135,000 after refusing to make cake for same-sex wedding
EU exit would hit UK economy much harder than neighbouring countries, study finds
Andrew Lloyd Webber: Phantom of the Opera writer mocked after issuing a warning about Ed Miliband and Nicola Sturgeon
General election 2015: Labour will toughen hate crimes legislation surrounding Islamophobia
iJobs Money & Business
£Basic (OTE) + Uncapped Commission: Guru Careers: A Stockbroker (qualified / p...
£20000 - £60000 per annum: Recruitment Genius: Are you recently QCA Level 4 qu...
£20000 - £22500 per annum + OTE £30K: SThree: SThree Group have been well esta...
£25 - 30k: Guru Careers: We are seeking an Application Support Analyst / 1st L...