Deutsche Bank is set to raise €8bn (£6.5bn) in fresh capital in a bid to bolster its finances after a torrid year.
Germany’s largest lender — and one of the biggest employers in the City — is also considering listing a small stake in its asset management arm. A previous plan to sell its German high street lender, Postbank, may now be scrapped.
The dramatic strategic shift follows a tumultuous year. Deutsche reported an annual loss of €1.4bn last month following a $7.2bn (£5.9bn) fine in the US over its role in selling toxic mortgages in the run-up to the 2008 financial crisis.
The bank has been hit with other penalties in recent months. In January it had to hand £502m to UK and US regulators over a “mirror trading” scandal in which Russian clients secretly exchanged more than $10bn of roubles and placed the money in offshore accounts.
John Cryan, the British boss of the bank, has already slashed the bonuses of more than 20,000 staff this year as a result of the settlements with regulators. But the capital raising is likely to shock shareholders as Cryan said earlier this year at the World Economic Forum in Davos that a capital boost was not in the bank’s “base case plan”.
On Friday, Deutsche said it was doing “preparatory work” on a capital increase of about €8bn. It is also considering combining its markets division and corporate finance arm, having split them in 2015.
Deutsche said a final decision on its new strategy had not been made and was “subject to market conditions” and approval by its management and supervisory boards, which are due to meet on March 16 and 17.