Deutsche Bank shares plunge on news of capital hike

Frankfurt-based Deutsche Bank still aimed to slash costs to the tune of €22.0bn by 2018, the lender said. The bank also announced that CFO Marcus Schenck, 51, and Christian Sewing, who oversees wealth management and consumer banking, would become co-deputy CEOs. Bank of New York Mellon Corp now owns 8,027,115 shares of the company’s stock valued at $105,075,000 after buying an additional 127,814 shares during the period.

At a board meeting yesterday (5 March), Deutsche Bank chose to react to its €1.4 billion loss previous year by issuing almost 700 million new shares and selling some of its assets.

“We see a strong industrial logic for the merger in terms of scale, capabilities and cost savings”, said Ben Cohen, analyst at Canaccord Genuity. “That should make us significantly more attractive for our clients”.

The bank will reverse its plan to sell Postbank, a big retail lender, and will instead integrate it further into its structure.

Deutsche Bank had signalled such a move on Friday, but it is still a significant about-face for Cryan, who insisted until recently that the bank did not need to raise capital. Barclays PLC set a €12.50 ($13.16) price objective on shares of Deutsche Bank AG and gave the company a “neutral” rating in a research note on Thursday, October 27th. Schenck will run the combined unit with Garth Ritchie, who now leads the trading division. Investors anxious that made a victory by far-right, anti-euro candidate Marine Le Pen more likely.China’s yuan was little moved, fetching 6.8920 yuan per dollar in offshore trade after China cut its growth target for this year to 6.5 percent, compared to its 2016 goal of 6.5-7 percent.

German banking giant Deutsche Bank AG has just announced a €8 billion share sale and investors aren’t taking the latest capital-raising initiative in stride, pushing the stock sharply lower in European trade. The UK’s Royal Bank of Scotland lost 1.8%, Germany’s Commerzbank fell 0.3%, and Credit Suisse slumped 3.2%.

Mark Fedorcik, head of Corporate and Investment Banking for the Americas added, “We are excited about the opportunities for our franchise in the United States and we are committed to making strategic hires to strengthen our platform and capitalize on areas where we see potential for important growth”. Investors were relieved when the settlement in December came at about half that amount.

The lender weathered that crisis, and its stock has rebounded strongly from its September lows, making a capital increase more appealing.