Mitsubishi UFJ Financial Group has unveiled plans to raise up to Y990bn (£6.8bn) in new capital to bolster its balance sheet as the global financial turmoil ensnared Japanese banks.

The capital raising by Japan’s largest banking group comes as tumbling stock prices and a deteriorating economic outlook threaten to undermine its financial health.

MUFG said yesterday it would raise up to Y390bn in nonconvertible preferred shares to undetermined investors and up to Y600bn in common stock, in the largest fund-raising in Japan so far this year.

The move follows a spree by MUFG, which has pumped $9bn (£5.8bn) into Morgan Stanley for a 21% stake at a large premium to the Wall Street firm’s current share price and $3.5bn to take full control of Union Bank of California.

Financial Times