Commerzbank said today it would launch a capital increase that could raise € 800 million after writing down investments by €2.3 billion in the third quarter to clean up its books.
Germany's third largest bank plunged to a quarterly net loss of €2.305 billion due to the writedown and said it would offer 53.3 million new shares to investors to bolster its capital.
Shares in Commerzbank traded more than five per cent lower but analysts said the bank should profit from the capital hike in the medium-term.
Commerzbank's stock has more than doubled in value this year, outperforming European peers, in part due to the return of takeover speculation.
Commerzbank's capital increase continues a series of fund raising efforts by Germany's top financial institutions.
Earlier this year, insurers Allianz and Munich Re both succeeded in raising billions of €s from rights issues, measures made necessary in part by their exposure to the country's weakened banks.
The placement is also a bet on rising demand for German banking assets as the sector emerges from its worst crisis in more than half a century. Last week, the holding firm of German public finance bank Depfa Bank sold shares worth €1.3 billion to international institutional investors.
