Deutsche Bank plans to raise capital, list its asset management business and overhaul its business structure as it tries to reinvent itself after spending two years dealing with its past misdeeds and huge losses. 

The strategic revamp was decided at a supervisory board meeting yesterday.

It follows a net loss of €1.4 billion last year and is part of the lender's push to draw a line under a string of scandals that have hammered its balance sheet since 2012.

The decision marks a retreat from a strategy announced less than two years ago when the bank separated its investment banking and markets business, and heralds its fourth capital hike since 2010. 

"On strategy, it's obvious we had a change of heart," the bank's chief executive John Cryan said on a call with journalists yesterday afternoon. 

"These measures will make Deutsche Bank stronger and place us back firmly on a path to sustainable growth," he added. 

Deutsche plans to launch an €8 billion rights issue of 687.5 million new shares on March 21, priced at around a 39% discount to Friday's closing price of €19.14. 

The bank said it also plans to list a minority stake in its asset management business and sell off other assets to raise a further €2 billion which, with the rights issue, should take its capital ratio above 13%. 

Deutsche will reunite its cash cow securities trading unit and corporate finance business under one roof, having separated them in 2015. 

The bank said those divisions, which will be combined with its transaction banking group, will now focus predominantly on serving corporate clients and less on institutional ones such as pension and hedge funds.
 

In another turnaround, the lender scrapped plans to sell its Postbank unit, saying it was unable to do so at an acceptable price. Instead, it now wants to reintegrate the operation into its other German retail business. 

"We are very positive over prospects of banking in Germany," Cryan said. 

Those measures mean the bank will have just three business divisions from now on - a private and commercial bank focused on Germany, a corporate and investment bank, and its asset management business. 

While litigation costs and writedowns on past acquisitions have weighed on Deutsche Bank's earnings, it has also fallen behind its Wall Street rivals, lagging their strong fourth quarter rebound in bond trading for instance. 

It has spent the past 18 months trimming down its product offering, throwing out unprofitable clients and trying to get its convoluted information technology into better shape. 

However the $7.2 billion settlement it reached with the US Department of Justice in December for selling toxic mortgage backed securities and its struggling markets business meant Deutsche Bank needed more radical action to bolster its balance sheet. 

The coming couple of months are seen as a good window by bankers for it to raise cash, coming ahead of France's presidential election in May and at a time when stock markets are at record highs. 

Deutsche is likely to have taken heart from the success of rival UniCredit's capital hike last month, when it raised €13 billion in Italy's biggest ever rights issue. 

A regulatory source said there had been no pressure from regulators on Deutsche Bank to raise capital and that it appeared to be a strategic decision. 

Many of the bank's investors see it as a necessary move despite the billions already ploughed into the bank in the past seven years. 

Since 2010 Deutsche Bank has raised more than €20 billion in fresh capital, yet its market value stands at just €26.4 billion. 

CEO Cryan said that the bank did talk about the rights issue with one of Deutsche Bank's major shareholders and was told the shareholder would take up its subscription rights. 

Deutsche Bank shares have recovered from a record low of €9.90 last autumn, but are still down a third from the time Cryan took office in July 2015. 

They trade at less than half of Deutsche Bank's book value, placing the lender among the 10 weakest banks in Europe and far off the peer average of just below book value.