Shimane Bank will raise ¥10 billion through a third-party allotment underwritten by SBI Shinsei Bank. It will strengthen its capital base by processing unrealized losses and prepare for intensifying competition in regional finance.
Shimane Bank announced on the 16th that it would raise ¥10 billion through a third-party allotment underwritten by SBI Shinsei Bank. As unrealized losses on securities grow amid rising interest rates, the bank will increase its capital buffer and strengthen its financial base.
The offering will involve the issuance of non-voting preferred shares to limit the impact on existing shareholders. Shimane Bank is an equity-method affiliate of SBI Shinsei Bank, which has been entrusted with 20.9% of the voting rights.
At the same time as the capital raising, the bank will sell approximately ¥60 billion of securities carrying valuation losses between January and March 2027. Its consolidated bottom-line result for the fiscal year ending March 2027 is expected to be a loss of ¥5.9 billion.
The bank plans to expand lending following the capital raising. Its standalone bank capital adequacy ratio is expected to improve from the current 7% to approximately 8.5% at the end of March 2027, strengthening its ability to capture regional demand for funds.