Deutsche Bank raises capital base by half
Deutsche Bank announced success on Wednesday in raising 10.2 billion euros (14.1 billion dollars), the biggest capital increase ever by the biggest German bank, boosting its capitalisation by nearly half.
The money is to be used partly to finance a huge takeover of German bank Postbank, and partly to build up the shareholder capital base in view of proposals from international banking regulators in response to the global financial crisis.
"The successful capital increase is an impressive demonstration of confidence in the future perspectives of Deutsche Bank," the statement quoted bank chairman Josef Ackermann as saying.
"We thank our shareholders for that and promise to do everything to meet their expectations," he added.
Deutsche Bank already owns nearly 30 percent of Postbank, which has Germany's biggest retail bank network, and is looking to add an attractive source of earnings to Deutsche Bank's investment bank activities.
It thus had "specific reasons" for launching the operation, which was "slightly positive for the entire banking sector because it shows a major capital increase is possible even at present," LBBW analyst Olaf Kayser told AFP.
"The purchase of Postbank will be even more interesting," he added.
Deutsche Bank issued a total of 308.6 million new shares at 33 euros per share, a statement said, raising its total market capitalisation from 25.7 billion euros to more than 38 billion euros at current share prices.
Present shareholders had a chance to buy one new share for every two they already owned, at a price well below the recent average of around 40 euros.
They were also able to sell such rights to others for a short period in September.
Deutsche Bank has offered only the minimum required for Postbank shares, 25 euros, prompting an association of small shareholders to threaten legal action in a bid to raise the sum, the business daily Handelsblatt reported.
Shares in Deutsche Bank gained 2.26 percent to 41.46 euros in midday trading on the Frankfurt stock exchange, while the DAX index of German blue-chips was 1.0 percent higher overall.
© 2010 AFP