Deutsche Bank is preparing a multi-billion euro capital increase, sources told Reuters, as Germany's biggest lender aims to quench doubts about its capital base.
The Qatari royal family will become a new strategic investor, taking more than a fifth of the 8 billion-euro share sale, the Financial Times reported on Sunday, without citing the source of the information.
Deutsche Bank's supervisory board was meeting on Sunday to prepare the capital increase, two sources familiar with the matter said. The board was also discussing a new strategic direction for the bank, which has posted another disappointing set of quarterly results.
The drop in profits, combined with litigation costs and new European Union rules for banks, have put pressure on Deutsche's capital. That had fuelled speculation Germany's largest banks would need to raise equity before long.
German newspaper Handelsblatt, citing unnamed sources, reported earlier that Deutsche Bank was planning to raise 8 billion euros ($10.96 billion) in equity capital and get a new major shareholder.
Deutsche Bank declined to confirm or deny the report on Sunday, but referred to comments made by co-chief executive Anshu Jain on April 29. Jain said then the bank "would not rule out any option" as it aims to strengthen its capital base amid rising regulatory demands.
It would be the second capital raising by Deutsche Bank in as many years. It raised almost 3 billion euros in a share sale last year.
($1 = 0.7297 Euros)
Copyright: Thomson Reuters 2014
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