Deutsche Bank board to meet Sunday to discuss capital hike

Reuters

Deutsche Bank will issue new shares to raise at least $8.5 billion and undergo restructuring in moves to turnaround the German banking giant.

Deutsche Bank wants another €8 billion ($8.5 billion) from long-suffering investors.

Deutsche Bank AG (FRA:DBK) has been given a €19.00 ($20.00) target price by research analysts at S&P Global Inc.in a research report issued on Tuesday.

A year ago saw a number of scares about Deutsche Bank's ability to resist financial shocks, as it emerged among the weakest performers in the European Central Bank's stress tests and had to negotiate with the US Department of Justice (DoJ) over a $14 billion fine sought for its role in the subprime mortgage crisis.

Earlier Friday, Bloomberg reported that Deutsche Bank was planning to raise more than $10 billion through a capital raise and partial sale of its asset management business.

Deutsche Bank also announced today it had made a "positive start in the first two trading months of 2017".

Shares (Berlin: DI6.BE - news) in the bank plunged at several points throughout the year, including when news of the DoJ's demand became public in September and when several hedge funds later withdrew investments.

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 percent.

The timing of the capital increase seeks to take advantage of a resurgence in Deutsche Bank's share price, which has nearly doubled from multiyear lows near EUR10 in September.

A renewed focus on Germany is a new direction for the bank, as many of its 8,000 open legal cases worldwide date back to its attempts to go toe-to-toe with British and American banking giants before the financial crisis.

"This now offers Deutsche Bank the opportunity to create Germany's biggest private and commercial bank, retaining a multi-brand approach", the bank said. The lender will propose a dividend in May of 0.19 euros per share and is recombining its investment banking and trading units. (The) set a €14.30 ($15.38) price target on shares of Deutsche Bank AG and gave the stock a neutral rating in a research note on Monday, October 31st.

The lender also plans to reduce its annual severance and restructuring costs from $25.6 billion to about $22.3 billion in 2021 when it plans to implement all measures of its restructuring plan.

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