Tokyo, May 8, 2026, 21:16 JST
- Tokyo Kiraboshi will buy back and cancel all Tokyo-held Class II preferred shares for ¥40 billion on May 25.
- The move ends a public-funds overhang tied to the former ShinGinko Tokyo, two years before the old fiscal 2028 target.
- Shares closed 5.2% lower; a separate Sumitomo Mitsui Trust Bank share sale creates the next test.
Tokyo Kiraboshi Financial Group will buy back and cancel all 2 million Class II preferred shares held by the Tokyo Metropolitan Government for ¥40 billion on May 25, drawing a line under a public-funds issue that has followed the lender for years. The bank holding company’s board approved the acquisition and cancellation on Friday, the company said.
The timing is the point. Kiraboshi had planned to redeem the shares in fiscal 2026 and fiscal 2028, but said solid business performance and an equity ratio expected to stay above its 8.3% stability benchmark allowed it to clear the lot early. Preferred shares are equity with special terms, often ranking ahead of ordinary shares; in this case they also kept Tokyo’s old rescue capital visible on Kiraboshi’s books.
The decision shifts a political story into a more ordinary bank-capital story. ShinGinko Tokyo, often rendered New Bank Tokyo, was established by Tokyo and later became one of Kiraboshi Bank’s predecessors; Nikkei described the repayment as clearing an Ishihara-era “negative legacy,” while pointing to remaining governance questions around the Tokyo government. Yahoo!ファイナンス
Kiraboshi had the earnings to move. For the year ended March 2026, ordinary revenue rose 23.8% to ¥199.26 billion, ordinary profit climbed 45.1% to ¥60.48 billion, and profit attributable to owners of the parent rose 35.0% to ¥42.36 billion. The company said loan interest increased by ¥12.6 billion as lending grew and loan yields rose after policy-rate increases.
President Hisanobu Watanabe called the preferred-share cleanup “our biggest long-held goal” and said early repayment had “many merits” for management flexibility, Jiji Press reported from a briefing. That is blunt language for a regional bank, but it fits the issue: this was not just a funding line. Yahoo!ファイナンス
Tokyo held 100% of the Class II preferred shares as of Sept. 30, 2025, company shareholder data showed. Sumitomo Mitsui Trust Bank held all of Kiraboshi’s First Series Class I preferred shares, another special class being cleaned up under the same capital overhaul.
The old corporate map was messy. Tokyo TY Financial Group integrated with ShinGinko Tokyo in 2016, and in 2018 Tokyo Tomin Bank, Yachiyo Bank and ShinGinko Tokyo merged to create Kiraboshi Bank, with the holding company renamed Tokyo Kiraboshi Financial Group.
A cleaner structure should make Kiraboshi easier to compare with other listed regional-bank names, including Mebuki Financial Group, Kyoto Financial Group and Iyogin Holdings, which appear as related stocks on market screens. The comparison is not perfect; Tokyo Kiraboshi remains more closely tied to the capital region and its small-business customer base.
But the cleanup is not cost free. Sumitomo Mitsui Trust Bank plans to convert its preferred shares into common stock and sell 5,498,500 shares in a secondary offering, meaning a sale by an existing holder rather than new capital for Kiraboshi. Underwriters may also sell up to 824,700 extra shares through an overallotment, an added block borrowed to meet demand, with pricing due between May 19 and May 22.
Investors did not wait for the dust to settle. Tokyo Kiraboshi shares closed at ¥11,490 in Tokyo, down 5.2%, with volume of 157,800 shares.
Kiraboshi said the preferred-share balance will be eliminated through the conversion, acquisition and cancellations. That ends one problem. The next one is simpler, and more market-facing: whether investors absorb the stock sale without turning a capital cleanup into a share-price overhang.
