GERMAN lender Commerzbank is today expected to outline plans for a capital increase of up to €10bn (£8.7bn) in a long-awaited plan to escape from the multi-billion euro government bailout it received at the height of the financial crisis.
Commerzbank, Germany’s second largest bank, required an €18.2bn bailout from the government in 2009.
The German government holds a 25 per cent stake in Commerzbank via so-called “silent participation,” a special form of non-voting capital. Commerzbank’s management has said it would like to free itself from government influence as soon as possible.
Germany’s second-biggest lender has said its repayment options include raising capital, retaining profits and using unneeded capital reserves that are freed up as Commerzbank reduces risky assets.
Commerzbank would need permission from its shareholders to proceed with such a large share sale.
A vote on the repayment plan is expected to take place at its shareholder meeting scheduled for 18 May. Commerzbank is believed to be flexible on how much it wants to raise through the capital increase.
Commerzbank declined to comment last night.