Mizuho To Raise Capital Base

Bank of America, JPMorgan Chase, Mizuho Securities and Nomura Securities are underwriting the sale of common stock

Mizuho Financial Group (Mizuho) is planning to sell about $6.3 billion of common stock to investors this week, reported Bloomberg. The Japanese banking behemoth is joining a select league of banks that are raising equity capital, as stock markets regain some lost ground.

Mizuho’s smaller rival, Sumitomo Mitsui Financial is already raising capital. Daiwa Securities, which offers asset management, retail and wholesale securities and investment operations, is planning to sell more than $2 billion stock. Nomura Holdings and Mitsubishi UFJ Financial have also raised capital through a common stock sale.

Keisuke Yokoo, CEO of Mizuho, quoted in an interview to Bloomberg that Mizuho Securities, the investment banking arm of Mizuho, plans to appoint approximately 150 investment bankers in London. They would oversee the merger advisory activities and start share management and bond sales in Europe.

However, analysts are not convinced with Mizuho’s 'equity health' and are skeptical about how the bank is going to realise growth with the capital it raises. Mizuho posted nearly $6 billion loss for year ended March 31, after a steep decline in domestic stocks has eaten into its investments, and bad-loan charges soared.