Postbank unveils €1-billion capital increase

The German bank Postbank announced on Monday an emergency capital increase worth up to €1 billion ($1.24 billion) to replenish it balance sheet which has been hit by the international financial crisis.

Postbank said it had lost €449 million before taxes in the third quarter of 2008. Investments with the failed US investment bank Lehman Brothers cost the bank €364 million, a statement said.

Postbank will take another €65 million in charges owing to the falling value of its stock portfolio, €47 million on its credit portfolio and €201 million on investments in financial derivatives that are at the heart of the crisis. The bank said it would not pay a dividend in 2008.

Parent group Deutsche Post will cover all of the capital increase, which it said would cost a maximum of €1 billion. The operation is to be finalised in the fourth quarter, with new shares costing €18.25 apiece.

Deutsche Post said the planned sale of a 29.75 percent stake in Postbank was “not put in question” by the operation.