Mitsubishi UFJ Financial Group Inc. is considering raising up to ¥1 trillion through public offerings of common shares by the end of the year to strengthen its capital base, sources said Saturday.

The move by MUFG, Japan's biggest banking group, is aimed at enhancing its financial standing in line with an expected tightening of international regulations on capital adequacy at banks.

The banking group already raised about ¥400 billion by issuing common shares and some ¥390 billion through preferred shares by late last year.

A new capital boost plan would allow MUFG to funnel more funds to small and midsize firms, the sources said, adding the bank also plans to use the funds to beef up its overseas businesses, including in Asia.

To ensure the soundness of financial institutions, the Group of 20 advanced and emerging economies agreed at a summit in September to tighten regulations on capital bases at banks in stages by 2012 on the premise of an economic recovery.

MUFG's capital adequacy ratio stood at 12.96 percent as of June 30. The planned global regulations will likely require that common shares compose more than 4 percent of banks' core capital.

The banking group's ratio of common shares in its core capital came to 5.76 percent at the end of June. A capital increase of ¥1 trillion is expected to raise both ratios by around 1 percentage point, the sources said.

Other megabank groups are also stepping up their efforts to boost their capital bases. Sumitomo Mitsui Financial Group Inc. raised about ¥861 billion and Mizuho Financial Group Inc. some ¥529 billion, both through common shares.