Tokyo - Sumitomo Mitsui Financial Group Inc announced a plan Wednesday to increase its capital by issuing preferred subscription securities and establishing a wholly owned subsidiary in the Cayman Islands.

The group, one of the three Japanese mega-banking groups, was expected to raise about 400 billion yen (4.14 billion dollars), according to media reports.

Sumitomo Mitsui plans to buy back about 283.75 billion yen in preferred securities issued in 1998 and 1999, which are not convertible to common shares, and redeem them on January 26.

Sumitomo Mitsui's decision came after two other mega-banking groups announced similar moves.

Last week, Japan's largest banking group, Mitsubishi UFJ Financial Group Inc, said it plans to raise nearly 1 trillion yen by issuing common and preferred shares while Mizuho Financial Group Inc said it would issue about 300 billion yen in the securities by the end of the year. (dpa)