Wednesday 20 November 2019

Deutsche Bank on course to raise €8bn in equity

Deutsche Bank’s headquarters on London Wall in the City
Deutsche Bank’s headquarters on London Wall in the City

Ruth David and Steven Arons

Deutsche Bank was poised to receive orders for almost all of the €8bn of stock on offer to investors as the sale drew to a close, according to people familiar with the matter.

Investors pledged to buy more than 95pc of the stock on sale in the rights offer, which ended yesterday, said the people, asking not to be identified because the details aren't public. About 80pc of existing investors decided to participate in the capital increase, with some opting to boost their exposure and new investors buying the rest, said one person. The shares are trading well above their offer price, a key factor in attracting demand, having rallied more than 60pc from their September low. Deutsche Bank fell 1.8pc at 9.36am yesterday in Frankfurt trading as European stocks declined.

The capital increase - the bank's fourth since 2010 - is the centrepiece in CEO John Cryan's new turnaround plan, which he announced in early March after Deutsche Bank failed to sell its Postbank unit to bolster capital. The company's key Qatari shareholders are buying shares to maintain their stake, according to people familiar with the matter. Chinese investor HNA Group has built up its stake to 4.76pc, and that number may increase, said one person with knowledge of the firm's strategy.

"Cryan has done a good job," said Ulf Moritzen, a fund manager with Aramea Asset Management, who is using the capital increase to increase his fund's exposure. "I see upside to Deutsche Bank, especially if interest rates rise in the euro area." Christian Streckert, a spokesman for the bank, declined to comment. The final subscription numbers will only be known after the sale closes.(Bloomberg)

Irish Independent

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