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Commerzbank ups capital

April 27, 2015

Germany's Commerzbank has announced it will strengthen its capital base by issuing a huge number of new shares meant to be bought up by institutional investors. No link to the Postbank sale, the lender hastened to add.

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Commerzbank logo DANIEL ROLAND/AFP/Getty Images
Image: Daniel Roland/AFP/Getty Images

Commerzbank officials said Monday the bank would place roughly 114 million new shares overnight with a view to achieving a capital increase of some 1.4 billion euros ($1.52 billion).

In order to pocket the sum aimed for, institutional investors would have to be willing to pay at least 12.30 euros per share.

Germany's second-largest lender said the fresh money would serve to up the bank's core capital ratio to above 10 percent, from 9.5 percent toward the end of March.

Convincing figures

The news came on the back of preliminary figures for the first quarter in which Commerzbank did better than expected, posting a net profit of 366 million euros, up from just 200 million euros in the same period a year earlier.

Operating earnings more than doubled to total 685 million euros despite a hefty writedown on Commerzbank's loan business with Austria's Heta bank.

Reuters reported Monday that Commerzbank's planned capital increase was in no way linked to the planned sale of Postbank by Deutsche Bank.

Germany’s Commerzbank - A look back

Some policymakers had mulled the option of merging Commerzbank, in which the state still has a 17 percent stake, and Postbank to create a stronger retail banking unit and with it a strong competitor for the Sparkasse savings banks.

But insiders noted Commerzbank had always set its sights on more affluent clients, meaning Postbank's not so well-off customers would not be a good bargain for it.

hg/cjc (Reuters, dpa)