Shinsei Bank planning to join TSE’s new standard market

Shinsei Bank, currently listed on the first section of the Tokyo Stock Exchange, said Tuesday that it plans to join the new “standard” section, which will be set up for midsize companies in the TSE’s market reorganization, in April next year.

The bank said that it will no longer qualify for the TSE’s new top-tier “prime” section after online financial service firm SBI Holdings Inc. raised its stake in the bank to 47.77% through a recent tender offer.

As around 70% of Shinsei Bank shares are now owned by SBI and the government, the amount of shares available for buying and selling on the stock market has been reduced drastically.

As a result, Shinsei Bank is not able to meet the prime section’s criteria of having at least 35% of freely tradable shares in all outstanding shares.

The bank is considering canceling part of its shares to raise the proportion of freely tradable shares as the figure may fall below the standard section’s criteria of a minimum of 25%, sources familiar with the matter said.

Shinsei Bank said it plans to buy back up to ¥20 billion of its own shares through May next year. It suspended purchases of its own shares in September.

SBI President and CEO Yoshitaka Kitao said Wednesday that taking Shinsei Bank private is “a likely option” to pay back about ¥350 billion in public funds that the bank received in the past.

Among other banks listed on the TSE’s first section, Shimane Bank and Jimoto Holdings Inc. are planning to have their shares traded on the standard section after the TSE’s market reorganization.