The bank, which has said it will pay 1.1 trillion yen to the government by March 2008, is taking advantage of a six-month, 63% gain in its shares to raise funds. Mizuho Financial Group Inc, Japans second-largest lender, raised 532 billion yen in October in the nations largest share sale since 2001.
The longest economic expansion since 1997 is helping end seven years of deflation and revive the nations stock markets. Repaying the money received in bailouts underscores the revival in Japans banks as they halved bad-loan ratios in the three years ended March 31, clearing 19 trillion yen of dud credits created by the countrys four recessions since 1991.
It is all going according to plan, said Jun Nishizaki, who overseas about $250 million in Japanese at Nissay Asset Management Corp in Tokyo. The economys recovering, bank stocks have risen and they are selling shares to repay the government.
Sumitomo will pay 1.1 trillion yen to the government by March 2008, is taking advantage of a six-month, 63% gain in its shares to raise funds
Japans biggest banks, including Mitsubishi UFJ Financial Group Inc, received more than 10 trillion yen from the government since 1998 to strengthen their capital as bad loans mounted. Mitsubishi UFJ, the worlds largest bank by assets, repaid 323.6 billion yen in October.
It still owes the government 820.5 billion yen of funds received in a 1999 bailout of the former UFJ Holdings Inc. Mitsubishi Tokyo Financial Group Inc bought UFJ in October to form Mitsubishi UFJ.