Shares of Commerzbank AG (CRZBY.PK) declined around 6 percent in the morning trade on Frankfurt's Xetra after the German bank issued shares to non-pay-scale employees, fulfilling its earlier announced share-based remuneration programme. The capital increase will boost Commerzbank's core tier one capital by 213.8 million euros in the light of the stricter regulatory requirements of Basel 3.
Commerzbank issued 176.55 million new shares to increase the share capital against contribution to fulfill non-pay-scale employees' individual variable remuneration entitlements for 2011 in the form of Commerzbank shares.
In a statement, the company noted that just under 90 percent of those non-pay-scale employees entitled to take part opted to have their variable remuneration paid out in shares.
The bank said 128.34 million of the newly issued shares will be placed as part of its coordinated sales transaction with Deutsche Bank AG as joint bookrunners. The proceeds are received by those employees of Commerzbank who have made their shares available for the placement.
The new shares, as said earlier, would be included in stock exchange trading for the first time on July 2.
In a statement on Wednesday, Commerzbank said its Board of Managing Directors with the approval of the Supervisory Board, adopted a resolution on the execution of the capital increase against contribution in kind.
According to the resolution, Commerzbank's subscribed capital would be increased by approximately 176.5 million euros or 3.2 percent to about 5.77 billion euros using authorized capital through the issue of these new shares.
Commerzbank yesterday said the German Financial Market Stabilization Fund intends to continue to maintain its equity interest ratio in Commerzbank, i.e., 25 percent plus one share, upon completion of the transaction. For this purpose, a corresponding portion of the silent participation is intended to be converted into shares, using the conditional capital authorized in the 2011 Annual General Shareholders' Meeting, it said.
Commerzbank shares are currently trading at 1.27 euros, down 0.08 euros or 5.98 percent.
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