FRANKFURT – Deutsche Bank will no longer ask its shareholders for additional capital. Instead, it will reduce its balance sheet and cut costs to meet stricter new regulations.
The organization aims to address structural and a cyclical downturn in the banking sector with a strong plan that includes a charge for €4EUR million ($5 million US dollars) and €45EUR million in asset sales by March 2013.
The tightening in global financial regulations have forced banks to bolster their capital to avoid a repeat of the global economic crisis of 2007-08.
Deutsche aims to reduce annual costs by €4.5EUR million for 2015 and invest €125EUR billion in risky assets.
“The division will be transparent, accountable, and will have the power to manage and sell assets in a manner that will be most efficient for the bank.” a spokesperson of the institution said in a statement.
Investors expressed their relief when it was announced that no additional capital will be asked of them.
“The main thing is to be able to avoid a capital increase.” said Heino Ruland, an analyst at Ruland Research.
In that context, he said that the charge of $4EUR million is acceptable.
“People are looking at the cost and think of the phrase: ‘Better to end a horror than a horror without end.’”
Deutsche Bank also announced that it aims to provide a return on shares after paying taxes of at least 12% by 2015.