Sumitomo Trust denies market rumors

Sumitomo Trust & Banking Co. on May 14 flatly denied market rumors that it would issue preferred stocks and terminate overseas operations due to losses, reports of which prompted stock exchanges to order trading in its shares be suspended.

Executive Director Takenori Osakabe told a news conference that while it was true the bank was considering new financing, the timing and means by which it will do so have not been decided. The bank said the financing would not be undertaken to make up for any losses.

Osakabe also flatly denied rumors that it incurred losses through foreign exchange deals and was planning to withdraw from overseas business, saying he regrets that such gossip ever surfaced. “We don’t know where the rumors started, but international operations are a pillar of the bank’s business and are still earning a profit,” he stressed.

The rumor that the bank was planning to issue preferred stocks led to a mass selloff of its shares during May 14 morning trading, and the Tokyo and Osaka stock exchanges ordered a halt in transactions of Sumitomo Trust shares until the bank gave an official explanation. The Tokyo Stock Exchange suspended trading in Sumitomo Trust shares for the entire session May 14 starting 10:35 a.m.