Capital News

By the end of 2011 Commerzbank had already complied with 57 percent of its nine per cent capital requirement, estimated by the European Banking Authority (EBA) at €5.3 billion, thanks to a billion in profit in the fourth quarter of 2011. A message dated 19 January said that the measures now taken give the bank the potential to up its core capital by the set date of 30 June by a total of around 6.3 billion euros from its own resources. The three main points of this package are the continued reduction of risky assets, with a core Tier-1 relief of around 1.5 billion euros, the further reduction of regulatory capital deductions in the amount of approximately €0.35 billion and a projected profit retention by the end of June amounting to around €1.2 billion. This includes planned additional fixed cost savings in the first half year amounting to around €150 million. The core capital will accordingly be raised to 6.3 billion euros (equivalent to a core capital ratio of eleven percent). Commerzbank plans initially not to take any government assistance, not to spin off its subsidiary Eurohypo into a Bad Bank and and not for the moment to convert its silent participation in Allianz.

Owners of the two SGL CARBON bonds had by 16 December converted a portion of the convertible debentures totalling €107.4 million, the Wiesbaden graphite specialist announced on 20 December. Simultaneously, the debt would decline by that amount. A total of 3,294,580 million new shares were created. The exercise of such conversion rights increases the current equity, after accounting for the remaining interest cost component and the included funding costs, by 98 million euros. In November 2011, BMW secured 15 percent of the Group.