The planned capital measures will increase the new Commerzbank's core capital ratio to approximately 10%
Commerzbank has announced that the German government’s Financial Markets Stabilisation Fund will receive a 25% plus one share participation in the new Commerzbank.
The German Government’s Financial Markets Stabilisation Fund (SoFFin), Allianz and Commerzbank intend to strengthen the equity of Dresdner Bank and Commerzbank. The planned capital measures will increase the new Commerzbank’s core capital ratio to approximately 10%.
SoFFin intends to provide additional equity totalling E10 billion to the new Commerzbank. This will be realised by issuing roughly 295 million ordinary shares, plus a silent participation of approximately E8.2 billion. A price of E6 per share has been agreed.
With the completion of the takeover, it is also intended that Allianz will boost Dresdner Bank’s capital by E1.45 billion by transferring collateralised debt obligations to Allianz with a nominal value of E2 billion at a purchase price of E1.1 billion.
For the new Commerzbank, this will lead to a reduction in risk-weighted assets of E17.5 billion and therewith a release of capital of E700 million according to Basel II. Furthermore Allianz will subscribe for a silent participation of E750 million.
Martin Blessing, chairman of the board of managing directors at Commerzbank, said: We are weatherproofing our bank for an economically stormy environment. This will enable us to fulfil our responsibility to offer loans to the German economy and to ensure we will continue to be a reliable partner for our clients.