Deutsche Bank revealed yesterday that it plans to raise €9.8 bn ($12.5 bn) in new equity to help it acquire Deutsche Postbank, a German retail bank.
The capital boost will also help the bank meet new capital standards announced by regulatory chiefs at the weekend.
Deutsche Bank already owns a 29.95 percent stake in Deutsche Postbank.
‘Together with Postbank, Deutsche Bank will take on an undisputed leadership position in our home market, Germany, and will advance to be one of the leading retail banks in Europe,’ said Deutsche Bank’s chief executive, Josef Ackermann, in a speech today.
The rights issue will allow shareholders to buy one new share for every two they own. The preliminary price of the new shares has been set at €31.80 ($40.79), a figure agreed upon by the syndicate of investment banks underwriting the deal.
The new banking regulations – agreed yesterday in Basel, Switzerland – will oblige banks to hold more capital in reserve to protect against possible losses.
Other banks may now follow Deutsche Bank and take steps to raise new equity in order to reassure financial markets.
‘Following the Postbank consolidation, we want to have sufficient reserves with regard to the new regulatory framework and future growth,’ added Ackermann in the speech.
