Deutsche Bank to Raise $8.5 Billion and Reorganize Some Operations

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LONDON — Deutsche Bank said on Sunday that it planned to raise an additional $8.5 billion in capital, reorganize its retail business in Germany and combine its markets business with its corporate and investment bank in the latest reshaping under its chief executive, John Cryan.

The latest capital raising — the company’s third in four years — came after the bank disclosed a loss of 1.9 billion euros, or about $2 billion, in the fourth quarter after a multibillion-dollar settlement with the United States Justice Department over the bank’s sale of toxic mortgage securities.

Deutsche Bank, Germany’s largest lender, had said on Friday that it was preparing to raise up to €8 billion in new capital, confirming the expectations of many investors that the bank would need to shore up its balance sheet. Banks have faced pressure from regulators since the financial crisis to increase their capital and maintain strong balances so they can better withstand a financial downturn.

The bank announced the capital raising, through the issuing of new shares, and a bevy of other actions as part of its strategic reorganization after a meeting by its supervisory board on Sunday.

“Our decisions are a significant step forward on the path to creating a simpler, stronger and growing bank,” Mr. Cryan said in a news release. “The capital increase will reinforce our financial strength substantially. The new three-pillar structure of our operating business should position us for significant growth, both in revenues and earnings.”

Deutsche Bank, which has big trading operations in New York and London, is in the middle of what has been a difficult turnaround — one that has been hampered by a low-interest-rate environment and billions of euros in fines and settlements for previous misconduct.

Mr. Cryan, who joined the bank in 2015, apologized to investors in February for misdeeds by the bank that had tarnished its reputation, and he said the company would “substantially limit” bonuses to top managers for 2016.

The bank agreed in December to pay $7.2 billion in a settlement with the Justice Department over its sale of mortgage securities ahead of the financial crisis. The bank has also faced accusations that it colluded with other banks to manipulate benchmark interest rates and that it helped wealthy Russians launder $10 billion.

On Sunday, the bank said it would seek to strengthen its business in its home market by reintegrating Postbank, a German retail banking business, with its private and commercial clients business in Germany. Deutsche Bank had been seeking to sell the Postbank business since spring 2015.

“This now offers Deutsche Bank the opportunity to create Germany’s biggest private and commercial bank, retaining a multibrand approach,” the bank said.

The combined business would have more than 20 million customers and give the bank greater scale in a competitive environment. It would cost 1.5 billion to 2 billion euros to reintegrate the business, Deutsche Bank said.

“The strategic benefits are overwhelming,” Mr. Cryan said on a conference call with journalists on Sunday.

Deutsche Bank also said it would combine its global markets business with its corporate and investment bank. The company had separated the businesses in 2015 as part of a restructuring.

“The bank intends to shift the focus in this business to corporate clients while retaining a strong but more focused institutional client base,” the bank said in a statement. “From one integrated division, clients will be offered services ranging from financing and payments to hedging and advisory. A higher proportion of the division’s balance sheet is in time expected to be deployed to support corporate clients.”

Deutsche Bank also plans to sell a minority stake in its Deutsche Asset Management business in a partial initial public offering.

The bank said Deutsche Asset Management would remain an integral part of its business model, but it hopes the offering will allow the unit to develop its business lines and attract additional talent through increased operational independence.

The bank said it intended to maintain a majority stake in the business and to complete the stake sale in the next two years.

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