Deutsche Bank €8 billion rights issue

Overview:

• Deutsche Bank is undertaking an €8 billion rights issue as part of a strategy to improve its beleaguered balance sheet, weakened by fines and loses. 
• Germany's biggest lender will issue 687.5 million new shares with subscription rights on March 21, 2017 as part of a series of measures intended to enhance its capital ratio to greater than 13%. 
• In addition to the rights issue, Deutsche has said it will raise a further €2 billion over the next two years by listing a portion of Deutsche Asset Management and selling other assets.
• The lender has also revealed it will no longer sell Deutsche Postbank as planned as it feels the business is being undervalued by potential buyers.
• Instead of being divested, Deutsche Postbank will be merged with Deutsche Bank's retail arm.
• In late 2016, Deutsche Bank agreed to pay €7.2 billion to settle a US investigation into the bank's sale of mortgage-backed securities (MBS).
• The fine and related legal fees contributed to the bank posting net loses of more than $2 billion for the fourth quarter of 2016, denting what had been - particularly when compared to 2015 when its net loss was almost €7 billion - an improved year. 
• The rights issue is the bank's fourth since 2010. 
• Credit Suisse, Barclays, Goldman Sachs, BNP Paribas, Commerzbank, HSBC, Morgan Stanley and UniCredit are underwriting the transaction. 

Ben Naylor - Regional editor