Germany's second biggest bank, Commerzbank, has unveiled plans to repay State aid which originated with a 2009 bail-out by raising €11 billion in fresh funds.
Commerzbank said it would repay €14.3 billion in what are known as 'silent participations' held by the German government by June, and pay off the rest by 2014 at the latest.
The government's silent participation means it does not hold voting rights normally associated with the stake.
Another €3.27 billion is to be repaid from excess regulatory capital and €1.9 billion redeemed from future capital by 2014, the bank added. Commerzbank's plans to reimburse the state were initially announced in February.
The state will retain its stake of 25% plus one share by 'converting additional silent participations into shares', Commerzbank said.
Capital markets were expected to provide €8.25 billion of the total amount of fresh equity, the bank said.
Commerzbank expects to post a better than expected operating profit for the first quarter of 2011 and for the year as a whole, and be able to pay a dividend for the 2012 financial year, it added.
For 2011, it has forecast an operating profit significantly higher than the 2010 figure of €1.4 billion but it is unlikely the bank will pay a dividend, chairman Martin Blessing said in February.
The bank was kept afloat during the financial crisis with government aid, but the German government has raised pressure on the bank to begin reimbursing the funds to help reduce public debt.
