Rather than investing $9 billion into Morgan Stanley, you wonder if Japanese bank Mitsubishi UFJ might have been better off just holding onto that cash itself. See, now they’re out looking for their own $10.6 billion injection:
AP: Mitsubishi UFJ Financial Group Inc. said Monday it will raise up to 990 billion yen ($10.6 billion) by issuing new shares over the next year, shoring up its balance sheet in the wake of a massive investment in Morgan Stanley.
The Japanese banking giant said it will issue up to 600 billion yen ($6.5 billion) in common shares in the one-year period from Nov. 4. It will also issue 390 billion yen ($4.2 billion) in a private allocation of preferred shares to take place in November.
A Japanese bank analyst points out that the company is fundamentally sound, and that it’s just falling stock market which is caushing problems (sounds familiar). Indeed, the Nikkei fell to a fresh 26-year low today. Reuters also reports that Morgan Stanley will be tapped to help manage the offering.
For more, the Heard On The Street column has a scathing take on the news, which concludes: “Still, after apparently learning from the bad-loan debacle that led to those bailouts, MUFG seems to have skipped the class on managing capital.”