BERLIN - Commerzbank AG, Germany said Thursday that it expects an increase in capital to support its financial strength, but the German Government will keep its participation by 25 percent.
Commerzbank said that it provides equivalent capital hike for as much as 10 percent, less than a share of its current capital. This means that issue until 118.1 million shares.
The Bank did not specify how it expects to raise, but says its capital at level 1 of the core - a key measure of financial soundness - will increase.
The move comes at a time where the Basel III is supposed to increase the amount of money, banks must put side as a buffer against potential problems.
"This transaction marks an important step in the optimization of the structure of Commerzbank capital," the Bank said.
Management and supervisory boards should finalize the size of the capital increase on 21 January, the company said. A consortium of banks - Credit Switzerland, Citigroup, Goldman Sachs and UBS - was to place the new shares with institutional investors since Thursday.
Commerzbank says it has an agreement with the credit Switzerland of securities whereby it can acquire hybrid-equity instruments issued by the German bank "at lower prices by" and contribute to Commerzbank in exchange for new shares.
Commerzbank has been helping during the financial crisis of the German Government, which owns a 25 percent stake.
Society said Government financial sector Rescue Fund provides continue 25 percent after the capital increase and the part of its "silent participation" is converted into shares.
Commerzbank shares were 2.8% in Frankfurt, euro5.49 ($ 7.15).
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