Germany's news in English

Editions:  Austria · Denmark · France · Germany · Italy · Norway · Spain · Sweden · Switzerland

Commerzbank beefs up financial situation

Share this article

Commerzbank beefs up financial situation
Photo: DPA
16:56 CET+01:00
Commerzbank, Germany's second-biggest bank needing €5.3 billion in fresh funds, said Wednesday a repurchase of securities will beef up its core capital by more than €700 million.

The repurchase of €1.27 billion of so-called trust preferred securities "will have a one-off positive effect of more than €700 million on our consolidated results and will result in a respective increase of Core Tier 1 capital," Commerzbank said in a statement. "The transaction marks another step in optimising our capital structure in light of the transition to the new regulatory requirements."

Investors had from December 5-13 to decided whether to sell the securities back to Commerzbank.

Last week, the European Banking Authority said German banks needed to raise €13.1 billion in new capital to withstand future financial shocks.

According to the EBA's calculations, Deutsche Bank, the country's biggest, needed €3.2 billion and Commerzbank, the number two, needed €5.3 billion.

Analysts and investors have speculated about whether Commerzbank would be in a position to raise the capital under its own steam, or require state funding after it already had to be bailed out in the 2008-2009 financial crisis which left the government with a 25-percent stake.

The bank has said it can manage on its own.

Investors welcomed the news, with Commerzbank shares showing a gain of 3.68 percent to €1.21 on the Frankfurt stock exchange in late afternoon trading.

The Local/mdm

Get notified about breaking news on The Local

Share this article

The Local is not responsible for content posted by users.
Become a Member or sign-in to leave a comment.

From our sponsors

How to work 9-5 and travel the rest of the time

A full-time job shouldn't stop you from satisfying your wanderlust. The Local spoke to Travel After 5 blogger Alline Waldhelm to find out her tips and tricks for travellers who only have 25 days of annual leave.