Frankfurt: Deutsche Bank is planning to raise capital, list its asset management business and realign its divisions as it seeks to reinvent itself after spending about two years dealing with past misdeeds and massive losses.
The strategic revamp decided at a supervisory board meeting on Sunday follows a net loss of 1.4 billion euros last year and is part of the lender’s push to draw a line under a string of scandals that have hammered its balance sheet since 2012.
Deutsche plans to launch an 8 billion euro ($8.5 billion) rights issue of 687.5 million new shares on March 20, it said on Sunday. Chief Executive John Cryan said the shares are likely to be priced at 11.65 euros, representing a 39 per cent discount to Friday’s closing price of 19.14 euros.
Additionally, Deutsche is planning an initial public offering (IPO) of a minority stake in its asset management business, which includes its mainstay DWS retail asset management brand and has been valued by analysts at about 8 billion euros.
The bank said that disposals and the IPO would boost capital by a further 2 billion euros and that the bank is targeting a capital ratio comfortably above 13 per cent.
Alongside announcement of new financial targets and a management reshuffle, Deutsche will also reunite its cash cow securities trading activities and corporate finance business under one roof.
In an about-face to its retail banking strategy, the lender scrapped plans to sell its Postbank unit, having failing to achieve an acceptable price. Instead, it now wants to reintegrate the operation into its other German retail business.
The rights issue is initially being underwritten by Credit Suisse, Barclays, Goldman Sachs, BNP Paribas, Commerzbank, HSBC, Morgan Stanley and UniCredit.