Deutsche Bank to Raise 9.8Bn Euros to Boost Capital Standing
Deutsche Bank to Raise 9.8Bn Euros to Boost Capital Standing

Before regulators move ahead with any regulations, Deutsche Bank has already struck a smart strategy.

As stated by Deutsche Bank, in order to acquire retail lender Deutsche Postbank and to increase its tier 1 capital ratio, it was planning raise nearly 9.8 billion Euros in a stock placement.

The announcement was made by the bank, after a day the central bankers declared coming up with new capital standards for global banks.

On Sunday, world's significant central banks made a revelation that they are framing set of rules known as Basel III to prevent occurrence of another global financial crisis and to rescue banks from facing liquidity crunch, as it happened earlier.

As per the new rules, the banks will have to increase their tier-1 capital ratio to 4.5% from 4% by 2013. Also, they will have to keep capital reserves near to 2.5%, as provision of their loans and investments.

Josef Ackermann, Chief Executive of Deutsche Bank said, “The bank's plan to issue 308.6 million new common shares was aimed at "strengthening the bank's equity capital in light of expected regulatory changes".

At the end of the second quarter, the bank maintained a tier 1 capital ratio of 11.3% and its core tier 1 ratio was 7.5%.

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