Deutsche Bank AG has approached investment banks to assess their interest in managing a stock sale to raise up to $11.4 billion, according to three people with knowledge of the talks.
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 expand its almost 30% stake in Bonn-based Postbank, which has a market value of $7.1 billion. Deutsche Bank chief risk officer Hugo Banziger said in an investor presentation in June that the Frankfurt financial company would only raise capital for deals.
"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 spokesman Ronald Weichert declined to comment Thursday. Deutsche Postbank chief executive Stefan Juette, speaking at a conference in Frankfurt Thursday, said he does not know whether or when Deutsche Bank may take over the lender.
In the past four years, Deutsche Bank has bought Berliner Bank AG, Nuremberg-based Norisbank AG, as well as ABN Amro Holding NV's commercial banking operations in the Netherlands and the private wealth manager Sal. Oppenheim Group. It agreed to buy a stake in Postbank in 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 ask securities firms to guarantee the offering by agreeing to buy shares that investors do not. Five banks, including Deutsche Bank, agreed to underwrite National Bank of Greece SA's $3.6 billion rights offering this week.
Rules proposals under consideration by the Basel Committee on Banking Supervision may force banks to raise reserves.
Germany's 10 biggest lenders, including Deutsche Bank and Commerzbank AG, may need about $133.4 billion in fresh capital because of the regulations, the Association of German Banks estimated Sept. 6.
The Basel committee compromised on capital ratios, agreeing to 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 Wednesday. The proposal will be the basis for a meeting Sunday of central bankers and regulators.
"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."
Policymakers are seeking to increase the reserves held by banks to prepare for another financial crisis. Deutsche Bank, which sidestepped the worst of the 2008 financial crisis and eschewed a government bailout, had a Tier 1 capital ratio, a measure of financial strength, of 11.3% at June 30.
