Commerzbank buys back securities to boost capital
Commerzbank, Germany's second-biggest bank, said Monday it will repurchase up to 600 million euros ($804 million) in hybrid securities in a move to beef up core capital.
"As another step in its capital management, Commerzbank is offering investors in selected hybrid equity instruments -- so-called 'trust preferred securities' issued by companies of the Commerzbank group -- to repurchase these instruments against cash consideration," the bank said in a statement.
The transaction will mark "another step in optimising our capital structure in light of the transition to the new regulatory requirements," it said.
It will have a "one-off positive effect" on earnings and "will result in an increase of Core Tier 1 capital," it added.
Investors will have from Monday until December 13 to accept the offer.
© 2011 AFP