Following a supervisory board meeting Sunday morning, Deutsche Bank AG (NYSE: DB) Chief Executive Officer John Cryan spoke about a "strategic revamp" planned by the German bank's management team. The plan includes a Rights Offering expected to attract €8 billion, selling a minority of the equity in its asset management business, and selling other assets, with a goal of raising an additional €2 billion. During a conference call following the meeting, CEO Cryan was reported by Reuters to have stated that "it's obvious we had a change of heart."

The Deutsche Bank rights offering includes plans to issue 687.5 million shares by offering rights to existing shareholders to purchase DB stock at an approximately 39 percent discount to Friday's closing price of $19.35, as reported by Yahoo Finance.

Together, the €8 billion from the DB stock issue and the €2 billion from selling other assets is expected to bring Deutsche Bank's "capital ratio above 13 percent."

Deutsche Bank, Lehman Brothers comparisons made regularly through 2016

Many financial publications made comparisons between Deutsche Bank and the now-defunct Lehman Brothers, with chatter seeming to reach a peak in mid-2016, when DB stock hit a low of $11.19, shortly after citizens of the United Kingdom voted to sever ties with the European Union. While shares of other financial giants, such as The Goldman Sachs Group, Inc. (NYSE: GS), rebounded vigorously following the Brexit vote, Deutsche Bank stock stubbornly clung to lows. Performing even worse than DB stock, is the stock of The Royal Bank of Scotland Group plc (NYSE: RBS): over the past year, DB stock is down 0.62 percent, while RBS stock is down 8.45 percent.

By comparison, GS stock is up 62.79 percent and the Dow Jones Industrial Average is up 23.03 percent, over the same period.

Deutsche Bank reported a net loss of €1.4 billion in 2016, equating to a per share loss of $1.28 for the past 12-month period. The employer of 99,744 last reported holding a cash position of $986.73 billion and debt of $832.66 billion.

Management delivered an operating margin of 3.24 percent, a profit margin of -4.90 percent, and a return on equity of -2.02 percent, in 2016.

German government will not 'let Deutsche Bank fail'

Reuters quoted John Cryan with regard to the reorganization, with the CEO stating that the plan will make "Deutsche Bank stronger and place us back firmly on a path to sustainable growth." MarketWatch's Ivan Martchev has observed that a failure on the part of Deutsche Bank would be critical, because its balance sheet is "three times as large as Lehman Brothers." He continued that regulators would not "let Deutsche Bank fail, given its size, even if it means nationalization and wiping out the shareholders." The bank paid a $7.2 billion settlement for its part in the subprime mortgage debacle, seen as being responsible for the institution's highly levered financial position, and seemingly regular tapping of capital markets.

DB stock's Friday close sees it trading about 72 percent above its all-time low of $11.19, observed in September 2016. Deutsche Bank investors will be watching prices closely early Monday for indications of selling. Yahoo Finance reports the Frankfurt-headquartered institution currently has 1.38 billion shares outstanding. The new issue, of 687.5 million shares, has the potential to cause selling pressure due to dilution to shareholder equity. However, buying, and price markups, in the wake of news of the issuance of new shares might be interpreted as a positive sign for both the market for Deutsche Bank stock, as well as the health of capital markets, overall.

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