Deutsche Bank shares hit by cash call

Shares in Deutsche Bank fell 5% in early trading on news it plans to bolster its finances through selling new shares.

Germany's biggest bank plans to raise about €8bn through the sale, due later this month.

The sale by the troubled bank is part of a wider shake-up.

Deutsche will also partially float its asset management business and retain Postbank - the retail banking business that it had been expected to sell.

The company will be reorganised around three divisions: private banking and wealth management; asset management; and corporate and investment banking.

The bank is trying to reshape itself after grappling with huge losses and a 15bn euro legal bill imposed by regulators since 2012.

In December, Deutsche Bank said it had agreed a $7.2bn payment to US authorities to settle an investigation into mortgagebacked securities.

The sale of residential mortgagebacked securities played a significant role in triggering the 2008 financial crisis.

Peter Hahn at the London Insti- tute of Banking and Finance said it was the first capital raising from Deutsche since it had drawn a line under many of its legacy issues.

"The atmosphere for banks has got much more positive in the last several months," Mr Hahn said. Deutsche Bank shares have risen 44% in the last six months, for example.

But there were still question marks over whether its investors would "put money in one more time", he said.

Deutsche will also promote chief finance officer Marcus Schenck and retail banking boss Christian Sewing to become co-deputy chief executives under chief executive John Cryan.

Mr Schenck will also become cohead of the investment bank alongside Garth Ritchie, who runs the bank's bond and equities trading activities.

Jeffrey Urwin, head of corporate and investment banking, will step down, and a new chief finance officer will be sought.

Deutsche aims to cut costs from €24.1bn to €22bn by 2018, as well as resume paying a "competitive dividend" to shareholders.