Shares of Deutsche Bank, the biggest German lender by assets, are tanking 6 percent in early Monday morning trading. The company announced on Sunday that it is planning to raise up to $8.5 billion (€8 billion) in new capital to finance a major overhaul of its business operations.
As part of the restructuring, the firm announced that it intends to dispose of its Deustche Asset Management business. Instead, the German lender will combine its Corporate Finance, Global Markets and Global Transaction Banking units.
The firm intends to offer up to 687.5 million new shares in a rights issue underwritten by Credit Suisse, Barclays, Goldman Sachs, BNP Paribas, Commerzbank, HSBC, Morgan Stanley and UniCredit. The subscription to the offering is starting on the 21st of March and ends on April 6th 2017.
Corporate & Investment Bank Restructuring
The company confirms in an official announcement that it will combine its Corporate Finance, Global Markets & Global Transaction Banking businesses. The firm is relying on corporate clients, but will also focus on Deutsche Bank’s institutional clients base.
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The German lender is aiming to run down a pool of legacy risk-weighted assets (RWA) totalling €20 billion. Deutsche aims to bring down the value to €12 billion by 2020. The company is aiming to cut its expenditures by €0.7 billion by 2018.
Jeffrey Irwin Retires
The Head of the Corporate & Investment Bank and Deutsche Bank’s US business, Jeffrey Irwin, will retire from the firm’s management board. He will continue to assist the company in compliance with US-related regulatory issues. His role will be taken over by the CEO of the company, John Cryan.
Asset Management Unit IPO
Deutsche Bank outlines its Asset Management unit as an integral part of its business model. A partial IPO of the division, the company is aiming to boost its active, passive and alternative lines of business.
Deutsche Asset Management currently holds over, with €700 billion of invested assets worldwide. The listing is expected to be involving a minority stake and is expected to occur over the next 2 years in Germany. Deutsche will retain a majority stake.