Deutsche Bank board to discuss capital hike on Sunday: sources

The head quarters of Germany's Deutsche Bank are photographed early evening in Frankfurt, Germany, January 31, 2017. REUTERS/Kai Pfaffenbach

FRANKFURT (Reuters) - Deutsche Bank's DBKGn.DE supervisory board will meet on Sunday to discuss plans for a potential capital increase of around 8 billion euros ($8.5 billion), two sources familiar with the matter said on Saturday.

Germany’s biggest bank said on Friday it was preparing a capital increase and was examining several strategic measures, including an initial public offering of a minority stake in its asset management business as well as retaining its Postbank unit and integrating it into its other German retail business.

The meeting on Sunday is expected to take place around noon, the sources said. Deutsche Bank declined to comment on the meeting.

The capital raising will allow Deutsche Bank to strengthen its balance sheet and free up funds for strategic investments after years of restructuring, a move welcomed by one investor on Saturday.

“The announced measures are an important signal for the capital market that the bank is now focussing more on its future and its customers after years of dealing with the past,” fund manager Ingo Speich at Union Investment said in an emailed statement.

“That’s to be welcomed, but investors still need more details.”

The move comes after Deutsche Bank posted a net loss of 1.9 billion euros in the final quarter of 2016 as legal costs for past misdeeds weighed heavily on results and the bank fell further behind its Wall Street rivals, lagging their strong rebound in bond trading.

“In comparison to rivals, Deutsche Bank is poorly capitalised. The legal disputes have cost lots of money and trust,” Speich added.

Reporting by Kathrin Jones and Alexander Huebner; Writing by Victoria Bryan; Editing by Alexander Smith