FRANKFURT (Reuters) - Deutsche Bank shares were indicated sharply lower on Friday after sources told Reuters Germany's biggest bank may raise up to 9 billion euros ($11.43 billion) to bolster its balance sheet and war chest.
Deutsche Bank's move would enable Germany's flagship lender to bulk up as tough new capital requirements for banks are finalized and pave the way for a takeover of Deutsche Postbank
Deutsche Bank declined to comment.
Its shares were indicated down 3.8 percent before the German market opens at 0700 GMT, while Postbank shares were seen up 4.2 percent.
"This reinforces worries about the health of European financial institutes," Close Brothers Seydler wrote in a note to clients.
Deutsche Bank's plans have not yet been formalized but such a move -- which one source said could come as early as next week -- could help it tap markets ahead of a raft of rivals which are expected to raise capital as well.
German lawmakers quoted European Central Bank Executive Board member Juergen Stark this week as saying German banks are undercapitalized and the German banking system will have to change.
The 10 biggest German banks may need 105 billion euros in fresh capital under so-called Basel III capital rules set to be adopted this weekend, the German Banking Association has said.
The timing of Deutsche Bank's potential capital increase was uncertain. Another source said a share issue could take several weeks.
Deutsche Bank is sounding out investment banks about the capital increase, one source said.
Consolidating Postbank would give Deutsche Bank access to Postbank's 14 million clients and help diversify its business away from the volatile earnings of investment banking.
Deutsche Postbank Chief Executive Stefan Juette told a banking conference on Thursday he did not know when or whether Deutsche Bank would increase its stake.
(Reporting by Edward Taylor, Philipp Halstrick, Alexander Huebner and Christoph Steitz; Editing by Michael Shields0
