- Deutsche Bank MELTDOWN: Shares Plunge as Bank Tries to Raise £6.9BILLION in Call for Cash
by LANA CLEMENTS, http://www.express.co.uk/
DEUTSCHE Bank shares have dived by six per cent after it announced a shock share sale aimed at raising €8billion (£6.9bn) of cash in a desperate bid to shore up the German giant.
The chief executive John Cryan previously said such a move would be a last resort for the bank. Now Germany’s largest lender wants to raise the extra capital amid reports of more legal issues, which could lead to more big fines for the troubled firm. It is the fourth time the bank has had to turn to investors for extra cash since 2010 and suggests Mr Cryan’s previous plans to save the bank has failed.
The boss has tried to slash costs for the bank by cutting thousands of jobs as well as bonuses for its workers, on top of selling off parts of the business. Mr Cryan said: “On strategy, it’s obvious we had a change of heart. “These measures will make Deutsche Bank stronger and place us back firmly on a path to sustainable growth.”
Deutsche last month posted a larger than expected net loss of €1.4bn (£1.2bn) for 2016, as it struggled to cope with costs of regulator fines, as well as low interest rates. This year the bank has already settled a huge £5.2bn ($7.2bn) penalty relating to the 2008 financial crisis, as well as a £504million charge over a Russian money laundering plan.
Now the lender reportedly faces further hits over previous actions in the forex market. Deutsche has now revealed plans to the huge rights issue of 687.5 million new shares on March 21, priced at around a 39 per cent discount to Friday’s closing price of 19.14 euros. It’s also looking to raise another €2bn (£1.7bn) by listing stake in its asset management business and sell off other assets.