Deutsche Bank Said to weigh sale of shares of up to $ 11.4 billion 2010

Deutsche Bank AG has approached investment banks to assess their interest in managing a stock sale to raise as much as 9 billion euros ($11.4 billion), said three people with knowledge of the discussions.
Germany’s biggest bank has yet to decide on the sale, said the people, who declined to be identified because the plans are confidential. The proceeds may be used to increase the bank’s stake in Deutsche Postbank AG and to meet rising regulatory capital requirements, the people said.
Deutsche Bank has the option to increase its almost 30 percent stake in Bonn-based Postbank, which currently has a market value of 5.6 billion euros. Deutsche Bank Chief Risk Officer Hugo Banziger said in an investor presentation in June that the Frankfurt-based bank would only raise capital for acquisitions.
“The only rationale for Deutsche Bank moving now is that they may be able to get Postbank cheaper than in the long run,” said Simon Maughan, an analyst at MF Global in London, which recommends buying the shares. “The size of the capital raising may factor in a small amount of capital for Deutsche Bank itself.”
Deutsche Bank declined as much as 4.2 percent in U.S. trading, and was $1.74 lower at $60.22 by 2:03 p.m. in New York. The bank has a market value of about 31.1 billion euros.
Deutsche Bank spokesman Ronald Weichert declined to comment today. Deutsche Postbank AG Chief Executive Officer Stefan Juette, speaking at a banking conference in Frankfurt earlier today, said he doesn’t know if or when Deutsche Bank may take over the lender.
Capital Needs
In the past four years, Deutsche Bank also acquired Berliner Bank AG, Nuremberg-based Norisbank AG, as well as ABN Amro Holding NV’s commercial-banking operations in the Netherlands and private wealth manager Sal. Oppenheim Group. It agreed to buy a stake in Postbank in September 2008.
Whether Deutsche Bank proceeds with a share sale will depend on the financing commitment it gets from different banks, one of the people said. Companies planning to sell stock typically seek to find securities firms to guarantee the offering, agreeing to buy stock that investors don’t order. Five banks, including Deutsche Bank, agreed to underwrite National Bank of Greece SA’s 2.8 billion-euro rights offering this week.
Proposed rules under consideration by the Basel Committee on Banking Supervision may lead banks to raise reserves. Germany’s 10 biggest lenders, including Deutsche Bank and Commerzbank AG, may need about 105 billion euros in fresh capital because of new regulations, the Association of German Banks estimated on Sept. 6.
Basel Rules
The Basel committee reached a compromise on capital ratios for banks that will introduce higher reserve requirements over a five- to 10-year period starting in 2013, Franz-Christoph Zeitler, the vice president of Germany’s Bundesbank, said yesterday. The proposal will be the basis for a Sept. 12 meeting of global central bankers and regulators, and an announcement on the new rules may be made as early as that day.
“I’m wondering if this is in relation to the Basel news that will be coming out over the weekend,” said William Fitzpatrick, a financial-industry analyst at Optique Capital Management in Milwaukee, which manages $700 million and owns stock in Deutsche Bank. “I’d imagine there’s a link there.”
Policy makers are seeking to increase the reserves held by banks to avoid another financial crisis. Deutsche Bank, which sidestepped the worst of the financial crisis and eschewed a government bailout, had a Tier 1 capital ratio, a measure of financial strength, of 11.3 percent at the end of June.
To contact the reporters on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net; Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net
http://learn-forex4trading.blogspot.com/