Commerzbank mulling capital increase: report

10th March 2011, Comments 0 comments

Germany's second biggest bank, Commerzbank, is mulling a capital increase by the end of June to be able to start paying back state aid, a press report said on Thursday.

"A capital increase will probably take place towards the end of the second quarter" and could raise between five and seven billion euros ($6.9-9.7 billion), the Financial Times Deutschland (FTD) said, citing a source close to the matter.

The bank has not yet made a decision however and the move would depend on developments in financial markets, the newspaper said.

Commerzbank wants to start the massive task of repaying the 16.2 billion euros in state aid it received two years ago during the global financial crisis.

Berlin is trying to plug the holes in its budget meanwhile and would like Commerzbank to reimburse at least half this year, the FTD said, citing several sources.

Commerzbank boss Martin Blessing said last month that the bank wanted to pay back "at least 10 percent" of the sum this year, after it posted a 2010 net profit of 1.4 billion euros.

Shares in the bank showed a loss of 1.89 percent to 6.02 euros in morning trade on the Frankfurt stock exchange, while the DAX index on which they are listed was 1.03 percent lower overall.

© 2011 AFP

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