Deutsche Bank is preparing a multibillion-euro capital increase as Germany's biggest lender aims to quash doubts about its capital base.

The Qatari royal family will become a new strategic investor, taking more than a fifth of the €8 billion share sale, according to reports.

Deutsche Bank’s supervisory board was meeting yesterday to prepare the capital increase, two sources familiar with the matter said. The board was discussing a new strategic direction for the bank, which has posted more disappointing quarterly results. The drop in profits, combined with litigation costs and new EU rules for banks, have put pressure on Deutsche’s capital.

That had fuelled speculation that Germany’s largest banks would need to raise equity before long.

German newspaper Handelsblatt, citing unnamed sources, reported earlier that Deutsche Bank was planning to raise €8 billion in equity capital and get a new major shareholder.

Deutsche Bank declined to confirm or deny the report on yesterday. – (Reuters)