“Commerzbank is planning to redeem around €14.3 billion in silent participations currently provided by the Financial Market Stabilization Fund (SoFFin),” a statement said.
Another €3.27 billion “are to be repaid from excess regulatory capital,” and €1.9 billion redeemed from future capital by 2014, the second biggest German bank added.
The state would nonetheless retain its stake of 25 percent plus one share by “converting additional silent participations into shares,” Commerzbank said.
Shareholders will have the right to buy so-called CoMEN, or conditional mandatory exchangeable notes, starting Thursday, which would be converted into normal shares once the operation is approved at the bank’s annual meeting.
“As a second step a capital increase with subscription rights is foreseen,” with the rights issue likely to take place from the end of May to the beginning of June.
Once all of the operations have been completed, Commerzbank’s Core Tier 1 capital, a buffer that protects against major unforeseen losses, will probably amount to 8.8 percent, the bank said.
Commerzbank should be able to pay a dividend for the 2012 financial year, it added.