TOKYO (Bloomberg) -- Mizuho Financial Group Inc., Japan’s third-largest bank by market value, may start selling about 600 billion yen ($6.3 billion) of shares as early as this week, two people with knowledge of the matter said.

Tokyo-based Mizuho plans to begin marketing the sale of common stock to investors, and may set a price early next month, the people said, declining to be identified as they aren’t authorized to discuss the deal publicly. Mizuho shares fell as much as 5.4 percent, the biggest intraday drop since May 14. Before Monday, they had gained 40 percent from a March 9 low.
“Investors who had bought the stock rushed to sell to secure returns as there’s concerns about dilution,” said Mitsushige Akino, who oversees the equivalent of $615 million at Tokyo-based Ichiyoshi Investment Management Co.
Mizuho, which said May 15 it planned to sell shares within a year in its first global offering, joins banks including Sumitomo Mitsui Financial Group Inc. in raising equity capital as stock markets recover. Daiwa Securities Group Inc., Japan’s second-largest brokerage, said June 26 it will sell about 240 billion yen of stock.
Bank of America Corp., JPMorgan Chase & Co., Mizuho Securities Co. and Nomura Securities Co. are underwriting the sale, Mizuho said in May. Masako Shiono, a spokeswoman for Mizuho Financial in Tokyo, declined to comment.
-----Create a buffer
Mizuho posted a 588.8 billion yen loss for the 12 months ended March 31, compared with profit of 311.2 billion yen a year earlier, after a record decline in domestic stocks cut into its investments and bad-loan charges climbed.
“The first thing they have to use this money for is to create a buffer against stresses and shocks,” said Ismael Pili, a Tokyo-based analyst at Macquarie Group Ltd.
Japanese banks and brokerages are investing to expand operations in Japan, Europe and the U.S. Mitsubishi UFJ Financial Group Inc., the nation’s biggest bank, is merging its securities arm with the local unit of Morgan Stanley, while Sumitomo Mitsui is purchasing Nikko Cordial Securities Inc. from Citigroup Inc.
Mizuho Securities, the investment banking unit of Mizuho, plans to hire about 150 investment bankers in London to strengthen its mergers advisory business and start managing share and bond sales in Europe, Chief Executive Officer Keisuke Yokoo said in a May 12 interview.