One of Japan’s largest banks, Sumitomo Mitsui Financial Group, is in talks with Barclays to invest about Y100bn (£470m) for a small equity stake in the UK bank.

Barclays has been looking to raise as much as £4bn in fresh capital in an effort to shore up its balance sheet without having to launch a lights issue that could leas to aggressive write-downs.

The UK bank has found itself under pressure from regulators and investors to boost its capital reserves. Barclays has been working on a plan that offers stakes to investors, including several sovereign wealth funds.

Barclays’ core Tier One equity ratio is among the lowest in Europe at a bout 5 percent.

The talks between Barclays and SMFG are a rather sensitive topic. It is unclear whether the UK bank will be able to raise the remaining funds it is seeking from other potential investors, according to a person close to the situation.

“Barclays and SMFG are also discussing a business alliance to capitalise on the UK bank’s network in Asia and its strength in wealth and asset management,” a source said. SMFG have declined to comment.

Japanese banks have been looking to expand outside their domestic market and become global players. In January Mizuho Corporate Bank invested £608m in Merrill Lynch.

“The Japanese banks have weathered the sub-prime crisis much better than western banks. Sumitomo Mitsui Financial Group has Y4,400bn in tier one capital, so using about $1bn of that makes some sense (since) it’s difficult to deploy capital effectively in (the domestic market),” said Brett Hemsley, a banking analyst at HSBC in Tokyo.

Barclays has written off £1.7bn so far this year on complex debt securities but analysts say the bank has been less conservative that some of its rivals in marking down assets related to the US sub-prime mortgage meltdown.

Barclay’s shares, which have recently fallen to a 10-year low on fears about its balance sheet and worries that it may dilute existing shareholders by issuing new equity, opened 1 percent higher on Friday at 319p.