DEUTSCHE Bank is planning to raise €8bn (£6.5bn) in new capital, it said last night, with the Qatari royal family already lined up as one of the main investors.
The German bank will raise €6.3bn in new equity via a rights issue, and said the remaining €1.75bn had already been placed with an investment vehicle owned by Sheikh Hamad Bin Jassim Bin Jabor Al-Thani of Qatar.
The new shares will help the bank boost its Tier 1 common equity ratio – a key regulatory measure of its capital stability – from 9.5 per cent to 11.8 per cent.
This ratio, which stood at just six per cent in mid-2012, has been a key focus of co-chief executives Anshu Jain and Jurgen Fitschen’s efforts to shore up the bank as part of a business plan known as Strategy 2015+.
In an update to the plan, also released last night, Deutsche Bank said it was now targeting a 12 per cent return on equity in both 2015 and 2016, and aiming for profits before tax of €2.5-3bn in its private and business client unit and €1.6-1.8bn in global transactions.
It also outlined a growth plan promising an investment in “the hiring of senior professionals” in the US, and said it hoped to start upping shareholder payout – including “competitive dividend payout ratios” – in the long term.
“These measures enable Deutsche Bank to position itself for long-term, sustainable success in a time of historic change in the global banking industry,” Fitschen and Jain said.