Shimane Bank to raise $63.4M from SBI Shinsei as it clears out losses
What's the deal? Japan's Shimane Bank will raise US$76.9M through a third-party allotment of preferred shares underwritten by SBI Shinsei BankDealroom has a profile for this one. Try Dealroom →. The post-IPO equity injection, announced in October, is set to complete in late December.
Why now? The regional lender is clearing its books: it will sell US$461.5M in securities carrying unrealised losses, booking a US$50M loss on the sale. The capital raise is meant to offset that hit and keep lending capacity intact.
By the numbers: Shimane now expects a consolidated net loss of US$46M for the fiscal year ending March 2027 — a sharp reversal from its earlier forecast of a US$2.08M profit. Its capital adequacy ratio, however, is projected to improve to about 8.5%.
What's the endgame? By writing off the portfolio losses in one go, the bank aims to cut future earnings volatility while preserving its role as a regional credit supplier. Recent results had deteriorated, including a US$5.38M quarterly loss tied to an US$6.15M exposure to ZentoshinDealroom has a profile for this one. Try Dealroom →, a payment processor now in bankruptcy proceedings.
The context: This is the third and largest capital injection by the SBI GroupDealroom has a profile for this one. Try Dealroom → into Shimane Bank. SBI Holdings first invested US$19.2M in 2019 under its "Fourth Megabank" initiative, forming a capital and business alliance.
The signal: SBI keeps deepening ties with Japan's regional lenders, extending a network of capital alliances with smaller banks under financial strain. The deal sits in the smaller end of funding rounds by size, reflecting the modest scale of regional banking rescues.
Read more: finance.biggo.com
Image credit: Spiegel
