Resona Holdings Inc. (8308), Japan’s fifth-largest bank by market value, headed for a 2 1/2-year high after the Nikkei newspaper reported the lender plans to complete a bailout repayment plan in five years.
Shares of Resona rose 1.7 percent to 556 yen as of 10:21 a.m. in Tokyo trading, on course for the highest close since November 2010. The Topix Banks Index fell 0.3 percent.
The lender, which owes the government 872 billion yen ($8.8 billion), will repurchase as much as 400 billion yen of preferred shares this fiscal year, the Nikkei reported, without saying where it got the information. Resona is among lenders rescued by taxpayers after amassing bad loans in the wake of Japan’s property and stock-market bubble in the 1990s.
“Completion of the repayment is positive in terms of profitability as it frees up Resona’s management,” said Yoshinobu Yamada, a Tokyo-based analyst at Deutsche Bank AG. “The bank’s shares are rising on the back of the report.”
Resona said in a statement today that nothing has been decided on the repayment plan.
The bank will defer a deadline for converting 160 billion yen of preferred shares into common stock, according to the report. It plans to repurchase 262 billion yen of common stock with a book value of 520 yen a share, the newspaper said.
Tokyo-based Resona has repaid 2.3 trillion yen of 3.1 trillion yen from the government so far, the Nikkei said. The bank had previously planned to pay back 450 billion yen of preferred shares by March 2016, using retained earnings.
The report follows Sumitomo Mitsui Trust Holdings Inc. (8309)’s buyback of 200 billion yen of shares from the government in March to complete its bailout repayment.
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