Deutsche Bank expects it will need 2-3 billion euros ($2.7-4.0 billion) of capital to meet the European Banking Authority's (EBA) tightened capital requirements by a mid-2012 deadline, a source familiar with the plans said on Thursday. Germany's largest lender would plan to meet the capital need by retaining earnings and cutting risk-weighted assets, though not by cutting lending, the source said.
"A capital increase is not needed," the source said, adding that Deutsche had already submitted capital plans to German banking supervisor BaFin. Deutsche would not need to sell assets to reach the target either, the source said, adding that the lender's announcement this week that was reviewing large parts of its asset management operations was unrelated to the regulatory capital plans.
Deutsche Bank declined to comment. The EBA has been refining its capital requirements for European banks since publishing an initial estimate on capital shortfalls late last month. Banks are still waiting for the finalised demands, due to be published by the end of November. Based on that estimate, Reuters calculated that Deutsche Bank's capital need would be around 1.2 billion euros.
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