Deutsche Bank could raise about €8 billion in new capital and announce several strategic changes to its group structure.
The cost to re-integrate Postbank, which Deutsche had previously wanted to sell, is likely to be between 1.5 billion euros and 2 billion euros, the bank's retail head added in a call with journalists. Deutsche Bank has posted more than 8 billion euros of net losses in the past two years as Cryan, who took over in 2015, settled misconduct investigations and scaled back capital-intensive debt-trading businesses. Schenck will run the combined unit with Garth Ritchie, who now leads the trading division.
After unveiling plans to restructure the business into four units to much fanfare only a year and a half ago, the group's strategy has pivoted once again to further simplify the business model into three divisions. The bank's Chief Financial Officer, Marcus Schenck and its CEO of Germany and Head of Private Wealth & Commercial Clients, Christian Sewing are assuming joint Deputy CEO positions, effective immediately.
The fundraising plans confirm many investors' expectations that Deutsche Bank would be forced to tap the market for the third time since early 2013.More news: Peugeot maker PSA has reached a deal to buy Opel and Vauxhall
In another about-face, the lender scrapped plans to sell its Postbank unit, saying it was unable to do so at an acceptable price.
"Deutsche Bank confirms that it is conducting preparatory steps for a potential capital raise of approximately Euro 8 billion and several potential strategic measures". "The capital increase will reinforce our financial strength substantially".
Losses and mounting legal bills raised doubts about Deutsche Bank's financial strength, which intensified after the U.S. justice department in September demanded $14 billion (€13.2 billion) to end an inquiry into mortgage securities that fuelled the 2008 financial crisis. A stake sale would allow the lender to hold on to a business that Deutsche Bank officials including Mr. Cryan have praised as an important part of the bank.