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Deutsche Bank raises nearly 3 bn euros in capital hike

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(Globalpost/GlobalPost)

Deutsche Bank, Germany's biggest lender, said Tuesday it raised 2.96 billion euros ($3.9 billion) in fresh capital after placing 90 million new shares with institutional investors at a price of 32.90 euros a piece.

"Today, Deutsche Bank AG placed 90 million new shares with institutional investors by way of an accelerated book build offering," the group said in a brief statement.

"The placement price is 32.90 euros per share. The aggregate gross proceeds amount to 2.96 billion euros. The purpose of the capital increase is to strengthen the equity capitalisation of the bank," the statement said.

Deutsche Bank had announced late Monday that it was planning an issue of new shares to strengthen its foundations in line with tougher international banking criteria.

The issue would raise the bank's core Tier 1 capital ratio from 8.8 percent to around 9.5 percent as so-called Basel 3 rules require banks to boost their capital buffers to protect against possible future shocks to the global financial system.

Deutsche Bank's shares soared by more than 7.0 percent on the news of the capital hike and a sharp rise in first-quarter profits.

Deutsche Bank shares leapt by 7.9 percent to an intraday high of 35.49 euros in early trading on the Frankfurt stock exchange but subsequently fell back slightly to show a gain of 6.11 percent.

At the same time, Deutsche Bank posted a first-quarter net profit of 1.7 billion euros, a jump of 18 percent from the same period a year earlier.

Co-chairmen Juergen Fitschen and Anshu Jain said in a statement: "We are proud of the achievements of the bank in the first quarter of 2013. We delivered robust financial performance, with substantial profit growth versus the prior year quarter."

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http://www.globalpost.com/dispatch/news/afp/130430/deutsche-bank-raises-nearly-3-bn-euros-capital-hike