Here we go again.
Shares in Deutsche Bank, which have been recovering nicely since September, are once again on the back foot after the lender presented plans for a €8bn capital increase and another strategic overhaul.
At the start of trading on Monday, the shares fell by 6 per cent. At pixel time, they were 5.5 per cent lower at €18.01, the lowest since mid-February.
The capital increase — via a rights issue of up to 687.5m new shares at a discount of 39 per cent to Friday’s close of €19.14 — should boost Deutsche’s core capital ratio, which stood at 11.9 per cent at the end of last year, to about 14.1 per cent on a pro forma basis. Deutsche will now target a capital ratio of “comfortably above 13 per cent” in future.
Alongside the capital raising, Deutsche will shrink its four divisions to three. Mr Cryan said the overhaul was “a significant step forward on the path to creating a simpler, stronger and growing bank”.
It will recombine the markets and corporate finance businesses split in October 2015. Postbank, put up for sale in April 2015, will now stay and be fully integrated with Deutsche’s other retail banking operations. Asset management will form the third pillar of Deutsche’s strategy. The restructuring will cost €2bn.