Shares in Germany's Commerzbank plummet 15%

22nd November 2011, Comments 0 comments

Shares in Germany's second-biggest bank Commerzbank sank 15 percent Tuesday to a historic low on fears that it may need far more capital than once thought to meet EU requirements.

The stock plummeted 15.13 percent to 1.15 euros on the Frankfurt stock exchange, by far the worst performance among the DAX 30 companies, whose index was down 1.22 percent to 5.537,39 points.

Commerzbank is one of the German banks most heavily exposed to Greek debt.

Last month the European Union's financial industry watchdog, the European Banking Authority (EBA), said the bank would need additional capital of 2.9 billion euros ($3.9 billion) by mid-2012 -- nearly 60 percent of the core equity capital needs of the entire German banking industry.

On Tuesday, rumours circulated that Commerzbank's needs may now have swelled to around five billion euros, sparking a sell-off of the bank's shares.

A company spokesman declined to comment.

Commerzbank, which turned to the German government for help during the 2008 financial crisis, said this month it was abandoning its profit target for next year after writedowns on its Greek bond holdings pushed it deeply into the red in the third quarter.

It added it was examining all options to meet the EBA's requirements including speeding up the sale of non-strategic assets and temporarily suspending all new loan business outside its core regions of Germany and Poland.

© 2011 AFP

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