FRANKFURT: Commerzbank, Germany's second-biggest bank, said Thursday it had approved a plan that would allow it to solve its capitalisation problems without state aid.
The European Banking Authority said in December that German banks needed to raise 13.1 billion euros ($16.9 billion) in new capital to withstand future financial shocks, with Commerzbank requiring 5.3 billion euros.
Commerzbank said Thursday it was able to reduce its capital requirement to 3.0 billion euros by the end of 2011 -- 57 percent of the required amount -- and expected to have 1.0 billion euros more than necessary by June 30.
"On the basis of the current business planning and subject to no further deterioration in the macroeconomic environment, and in particular no further escalation of the sovereign debt crisis, Commerzbank expects to achieve further positive effects... to meet the EBA capital requirement by June 30, 2012," it said.
Investors cheered the news, with Commerzbank shares soaring 10.6 percent to 1.56 euros on the Frankfurt stock exchange in late morning trading.
It said it accomplished this with a combination of measures including reducing risk-weighted assets, regulatory capital deductions and retaining earnings in the fourth quarter of last year.
Analysts and investors have long speculated about whether Commerzbank would be in a position to raise the necessary capital under its own steam or require state funding after it already had to be bailed out in the 2008-2009 financial crisis which left the government with a 25-percent stake.
The bank has repeatedly said it can manage on its own.
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