“Deutsche Bank AG (DBK) (DBK), continental Europe’s biggest bank, is raising 5 billion euros ($6.5 billion) in capital, three months after co-Chief Executive Officer Anshu Jain said a share sale wasn’t in investors’ interests.
The company issued 2.96 billion euros of stock at 32.90 euros apiece, exceeding an initial goal of 2.8 billion euros, as part of the capital increase, the Frankfurt-based lender said in a statement today. Deutsche Bank’s shares surged as much as 7.9 percent, the biggest rise since August.
Jain timed the capital increase to coincide with a report showing first-quarter earnings rose 19 percent, beating estimates. He’s boosting reserves after Standard & Poor’ (SPY)s warned of a possible credit rating downgrade. Jain said in January he was willing to take losses on asset sales rather than issue new stock, citing the level of the share price.
“We are now among the best capitalized banks in our global peer group,” Jain said on a conference call with analysts and investors today. “These measures allow us to take advantage of organic growth opportunities in a changing competitive landscape.”
Deutsche Bank’s shares climbed 6.3 percent to 34.98 euros at 9:32 a.m. in Frankfurt trading, valuing the firm at 33 billion euros. The Bloomberg Europe Banks and Financial Services Indexrose 1.3 percent.
The bank will also sell 2 billion euros of subordinated debt, Jain said on the conference call.
