Deutsche Bank shares plunge 6 percent
March 5, 2017By 9.30am local time (08.30 UTC) on Monday, Deutsche Bank shares traded down nearly 5 percent at 18.20 euros ($19.36), having opened even lower on the Frankfurt Stock Exchange.
The fall made Deutsche the worst performer in the DAX index of leading German companies, hours after it announced a planned capital increase of roughly 8 billion euros ($8.5 billion) beginning on March 20, as the bank faces 15 billion euros in legal settlement fees incurred since 2012.
In a statement on Sunday, Deutsche Bank Chief Executive John Cryan billed the plans "a significant step forward on the path to creating a simpler, stronger and growing bank."
Additionally, the Frankfurt-headquartered lender said it will retain Postbank, which had been slated to be sold off, with Deutsche's private and commercial clients and list its asset management "in order to unlock growth potential in the business."
The bank also said it will reorganize its structure to focus on three business divisions: its private and commercial bank, asset management, and corporate and investment banking, which will be compromised of corporate finance, global markets and global transaction banking.
Deutsche Bank has already announced a major restructuring with at least 9,000 jobs cuts planned in Germany alone.
A plan for 'significant growth'
The lender also said it wants to reduce annual costs from 24.1 billion euros to around 21 billion euros in 2021.
"Our decisions are a significant step forward on the path to creating a simpler, stronger and growing bank," Cryan was quoted as saying in the statement. "The capital increase will reinforce our financial strength substantially. The new three-pillar structure of our operating business should position us for significant growth, both in revenues and earnings."
In December, Deutsche agreed to a $7.2 billion settlement with the US Justice Department for dealing opaque bonds based on home loans in 2005-2007, which helped start the global financial crisis.
The lender has been connected to other misdeeds as well, including rigging interest benchmarks with other large lenders and money-laundering. It currently faces some 7,000 separate lawsuits and regulatory cases.