Frankfurt - AFP
Commerzbank, Germany\'s second-biggest bank, said Wednesday that it will undertake a 2.5-billion-euro ($3.3-billion) capital hike to repay further chunks of a state bailout it received during the 2008-2009 financial crisis. \"Commerzbank is planning an early repayment in full\" of about 1.6 billion euros in so-called \"silent participations\" from the German bank bailout fund SoFFin and a further 750 million euros from insurance giant Allianz, the bank said in a statement. Silent participations are a form of debt under which creditors agree to forego voting rights in the company. In order to raise the funds needed for repayment, Commerzbank had decided to undertake a capital increase, which it would ask shareholders to approve at the annual general meeting of Commerzbank, originally set for May 22 but now being brought forward to April 19. Once the operation has been completed, SoFFin\'s shareholding in Commerzbank was expected to decrease from 25 percent plus one share to below 20 percent, the bank said. In 2008 and 2009, the state invested around 16.4 billion euros in Commerzbank as it struggled to integrate the distressed Dresdner Bank. Commerzbank has already repaid most of the money and \"with the announced repayment of the remaining 1.6 billion euros, the silent participations of the Federal Republic will be repaid in full,\" Commerzbank said. \"With the complete repayment of the silent participations of SoFFin we are repaying ahead of schedule all components of the state support over which we have influence,\" said chief executive Martin Blessing. \"The support of politicians and the taxpayer was very important for us during the financial crisis. For us the repayment of the silent participations and the reduction in the Federal Republic\'s stake marks the beginning of the end of the Federal Republic\'s engagement in Commerzbank,\" Blessing said. On the Frankfurt stock exchange, Commerzbank shares were the biggest losers in midday trading however, shedding 8.51 percent in a slightly softer overall market.