Aozora Bank Shares Surge 9.4% After City Index Eleventh Reveals 5.4% Stake

Shares of Aozora Bank experienced a significant increase after Tokyo-based activist investor City Index Eleventh disclosed its ownership of a 5.4% stake in the Japanese bank amid a recent decline in stock prices.

Sharp Increase in Share Value

The shares surged by 9.4% to reach 2,748.0 yen on Thursday morning, following an initial rise of up to 18%.

Strategic Investment Move

City Index Eleventh revealed that it, along with an associate, had purchased 6.4 million Aozora shares in the market for Y13.70 billion ($90.9 million) this month. The investment firm stated that the acquisition was made to potentially introduce significant proposals to the bank's management, based on the prevailing circumstances.

Aozora Bank's Recent Challenges

Aozora Bank faced a decline earlier in the month due to a fiscal-year net loss forecast caused by increased provisions for U.S. office loans and losses from foreign bonds. The bank now anticipates a net loss of Y28.0 billion for the fiscal year ending in March, as opposed to the prior estimate of a net profit of Y24.0 billion.

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