The Deutsche Bank headquarters stands in front of commercial and residential property in Frankfurt. A stake worth €1.75bn has already been placed with an investment vehicle owned by a private Qatari investor, Deutsche Bank said in a statement.

Reuters/Frankfurt

Deutsche Bank said yesterday it would raise €8bn in new capital, with a private Qatari investor lined up as a major new buyer, in a bid by Germany’s largest bank to end questions about its capital position.

The bank had already raised €10.2bn in equity in 2010 and a further €3bn in 2013, but that had not been enough to assuage investor concerns about its capital position as it faces increased regulatory demands.

A stake worth €1.75bn has already been placed with an investment vehicle owned by a private Qatari investor, Deutsche Bank said in a statement. It plans to raise another €6.3bn in a rights issue to existing shareholders.

Deutsche Bank said it would focus on an “accelerated growth programme” by hiring top bankers in the US, investing some €200mn over three years on digital improvements in Germany and Europe, hiring up to 100 advisers to support its biggest corporate clients and expanding its wealth management team in key markets by 15% over three years. Deutsche Bank’s supervisory board met yesterday to prepare the capital increase, sources familiar with the transaction told Reuters earlier.

New European Union rules requiring lenders to hold more equity capital to cover potential losses have put pressure on Deutsche to raise capital. A drop in profits, combined with a spike in litigation costs, have also dogged the lender.

The capital measures will increase Deutsche Bank’s Common Equity Tier 1 ratio by approximately 230 basis points, from 9.5% at the end of the first quarter of 2014 to 11.8%, the bank said.

“These measures enable Deutsche Bank to position itself for long-term, sustainable success in a time of historic change in the global banking industry,” Deutsche Bank’s co-CEOs Juergen Fitschen and Anshu Jain said in a statement.

Until now, Deutsche Bank had targeted a core tier 1 equity ratio of 10% under the Basel III bank rules in their most stringent form as of March 2015. It had aimed at achieving that mainly by retaining earnings.

Last month, Jain said the bank “would not rule out any option” to strengthen its capital base. Tapping shareholders for cash represents a clear change in Deutsche’s plans. It said in January it had not discussed raising equity since raising 3bn ($4.15bn) from shareholders last year.