FRANKFURT--Commerzbank, Germany's second-largest listed bank,
said it will take advantage of "attractive" market conditions to
conduct a EUR2.5 billion capital increase, as it looks to bolster
its balance sheet and take another bold step to reduce government
involvement in the bank.
The capital increase will include subscription rights for
current shareholders and be voted on at the annual meeting, moved
up to April 19 from the original date of May 22.
Commerzbank said the move will allow it to fully repay the
remaining EUR1.6 billion in non-voting shares, known as "silent
participation," still held by the German government's SoFFin
financial markets stabilization fund and the EUR750 million held by
Allianz SE (ALV.XE).
After the completion of the capital increase, SoFFin's 25%
shareholding in Commerzbank, which it held in addition to the
non-voting shares, is expected to decrease to below 20%.
"For us, the repayment of the [non-voting] silent participations
and the reduction in the Federal Republic's stake marks the
beginning of the end of the Federal Republic's engagement in
Commerzbank," the bank said.
Subsequently, the bank will also be able to resume dividend
payments in the future, it said. The bank also announced plans for
a consolidation, or reverse 1-for-10 stock split, that will reduce
the outstanding shares to 583 million shares from 5.83 billion
shares, with the price multiplied by 10.
During the financial crisis, the German government injected
EUR18.2 billion in Commerzbank to keep the bank afloat in the wake
of the ill-timed acquisition of Dresdner Bank.
Along with a 25%-plus-one-share stake, the government received
so-called silent participations, essentially non-voting shares,
totaling EUR16.4 billion. The bank repaid EUR14.3 billion of the
silent participations in 2011, along with a one-time payment of
EUR1.03 billion.
As a result of the transaction announced Wednesday, the fully
phased-in Basel 3 Common Equity Tier 1 ratio--a key measure of a
bank's financial health--will rise to 8.6% from 7.6% as of year-end
2012 on a pro forma basis as of that date. That figure will rise to
9% by the end of 2014, Commerzbank said.
-Write to Ulrike Dauer at ulrike.dauer@dowjones.com
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