Resona to Buy Back Preferred Shares From Japan's Government for $5 Billion
Resona Holdings Inc., Japan’s fourth-biggest bank, said it will buy back preferred shares for 425.7 billion yen ($5 billion) from the Japanese government as a part of its efforts to repay public funds.
Resona will buy 200 million preferred shares from the government on Aug. 31, the Tokyo-based lender said in a statement to the Tokyo Stock Exchange today. It will cancel the shares after the purchase.
The Deposit Insurance Corporation of Japan today approved the sale of the shares, which have a book value of 400 billion yen, the government body said in a separate statement. Resona still owes the government at least 1.3 trillion yen.
“The gravity of public funds hasn’t disappeared with this repayment, and we will accelerate management reform to secure funding for further repayments,” Eiji Hosoya, chairman of Resona, said in the statement.
Under former Prime Minister Junichiro Koizumi, the government injected 1.96 trillion yen into Resona in 2003 after its capital fell below minimum regulatory requirements. Koizumi tapped Hosoya, then vice president of East Japan Railway Co., to turn around the bank.
Resona’s shares rose 4 percent to 910 yen in Tokyo today, the biggest gain since May 27.