Sumitomo Mitsui Financial eyes sale of $8.7bln shares

Source says selling of shares is aimed to comply with more stringent capital requirement and for expansion.

Sumitomo Mitsui Financial Group's (SMFG) board will meet to formally approve the 800 billion yen ($8.7 billion) fundraising, said five people, who were not authorized to speak publicly about the matter. The bank has begun preparing for the sale and will decide the terms by the middle of this month, they said.

The bank's president Keisuke Kitayama said in a report in Reuters that while nothing had been decided yet  about fundraising, such a move would be needed.

SMFG is the latest big Japanese lender to tap a modest stock rebound for much-needed fundraising. Industry leader Mitsubishi UFJ Financial Group raised about 1 trillion yen last month through a share sale.

Without these fundraisers, Japanese banks would fall short of new global capital requirements, analysts have said. The SMFG move is likely to put pressure on second-ranked Mizuho Financial Group, which has yet to announce fundraising plans.