Analyst View: Deutsche Bank's share sale plans
Deutsche Bank, Germany's top lender, is mulling a share issue of up to 9 billion euros ($11.42 billion) to bolster its balance sheet and war chest, sources told Reuters on Thursday.
Sources said the company may use parts of the potential share sale to fully take over the rest of Deutsche Postbank, in which it already has a minority stake.
Here are some of the views from analysts and brokerages:
Michael Rohr, Analyst at Silvia Quandt, Frankfurt:
"Albeit we would welcome an early re-capitalization of Deutsche Bank ahead of Basel III, we believe taking over Postbank soon not to be the right step from a (Deutsche Bank) perspective, not only given the dilution for (its) shareholders, but also due to numerous risks still on Postbank's balance sheet."
Matthias Duerr, Analyst at Dz Bank, Frankfurt:
"The news will be burden (Deutsche Bank's) share price. We recommend being cautious ... until more details of a capital hike are released. The fair value of (Deutsche Bank) is under review."
Heino Ruland, Strategist at Ruland Research, Frankfurt:
"It is hawked that (Basel III) capital requirement can reach a maximum of 16.0 percent of tier 1. Tier 1 capital reached 34.4 billion euros at the end of last year. In case of fulfilling rumored requests (Deutsche Bank) would need an additional 9.3 billion euros. Deutsche Postbank is probably less of an issue as (Deutsche Bank) recently mentioned that it has all time in the world to raise its stake."
Close Brothers Seydler Research, Frankfurt:
"Deutsche Bank may use the proceeds received from selling new stock to increase its stake in Deutsche Postbank AG and to meet rising regulatory capital requirements. This reinforces worries about the health of European financial institutes."
[Source: Reuters, Frankfurt, 10Sep10]
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