ERZBANK will have to work hard to entice investors to its €2.5bn (£2.1bn) share call this month after painting a bleak outlook for the rest of this year.
Chief financial officer Stephan Engels said 2013 would be a year of transition for the bank, which posted a smaller than expected net loss of €94m in the first three months as it booked a €493m restructuring charge linked to as many as 6,000 job cuts.
“Revenues will stay under pressure, costs are expected to increase,” Engels said, adding the bank hoped to see positive effects from its revamp next year.
A source with knowledge of the bank’s capital increase said Commerzbank may therefore have to offer new shares at a hefty discount of about 50 per cent.
The source also said Commerzbank could knock at least 35 per cent off the theoretical ex-rights price of the new shares, implying that these may be sold at around €5.50 apiece.
Since a 2008 bailout, the German government owns 25 per cent of Commerzbank, but its holding will be diluted to roughly 18 per cent as it will not participate in the capital increase.