The biggest bank in Germany, Deutsche Bank said it had finalized a capital boost plan it announced on May 18 in compliance with new EU regulations that require lenders to establish cushions against potential economical distress.
The lender said it generated a total of 8.5 billion euros or $11.6 billion, recording the second-largest capital injection in its history. The financial institution had floated 300 million shares, with another 60 million being placed with Paramount Holdings Services, the investment vehicle of the Qatari royal family.
“We’ve taken decisive steps to protect Deutsche Bank against known capital challenges, sharpen our competitive edge and accelerate investments in growth in all our business divisions,” DW quotes the lender’s Co-CEOs Anshu Jain and Jürgen Fitschen as saying in a joint statement.
On a general note, investors backed the injection of additional capital when it was revealed last month, saying it was indicative of the Germany’s lender move to ease jitters over a capital deficit that had troubled it since the financial crisis.
However, Deutsche Bank’s worries a far from over, especially regarding the performance of the investment bank, which is its largest unit. The lender also faces a number of regulatory and legal hurdles including the ongoing global scrutiny into manipulation of currency price and a US investigation into financial cooperation with Iran.
The bank’s shares have sank by more than 10% since Jain announced late last month that he would explore all options to ensure the lender hit its capital objectives, according to Reuters. The Stoxx Europe 600 banking measure has remained little changed over the period.
The bank said about 6.75 billion euros of the capital generated came from a public offering, with 99.1% subscriptions rights at 22.50 euros a share having being exercised. The firm added that the remaining shares would be offered in the market.
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