Deutsche Bank is preparing an 8 billion euro ($11 billion) capital increase that will see the Qatari royal family become a major shareholder as Germany's biggest lender aims to quash doubts about its capital base.
Qatar will buy shares worth 1.75 billion euros and a subsequent rights issue is expected to raise 6.3 billon of new equity, Deutsche Bank said on Sunday.
The transaction will help Deutsche Bank shore up its capital ratio, which is currently lagging that of peers. The measures will increase the core equity tier 1 ratio by about 230 basis points to 11.8 percent.
Deutsche Bank is leading the share offering itself. The subscription will run through June 24 2014, and a syndicate of banks has agreed to a firm underwriting of the new shares.
Separately, Deutsche Bank has set itself new financial targets and is now aiming for a return on equity of approximately 12 percent in 2016 on a reported basis.
"Deutsche Bank aspires to return surplus capital to shareholders - including in the form of competitive dividend payout ratios - in the long term," the lender said in a statement.
