German banking group Deutsche Bank has announced it is planning a bond buyback worth €1bn, capitalising on its excess liquidity reserve. Liquidity reserves stood at €268bn at the end of September.
Under the offer, scheduled to close on 27 November 2018, the German lender is buying back euro-denominated senior non-preferred securities.
The securities in question are long-dated. One of them is 1.125% dated March 2025, while the other is 1.75% dated January 2028.
With the buyback, the bank aims to optimise its future interest payments as well as maturity structure.
Deutsche Bank CFO James von Moltke said: “Using a small part of our high-cash position to repurchase senior non-preferred securities reflects our aim to redeploy excess liquidity without taking undue risk. This benefits all our stakeholders.”
The latest move comes shortly after the banking group registered a 65% slump in its net income in the third quarter of 2018. The bank’s net income for the quarter ended 30 September 2018 was €229m versus €649m a year ago.
The bank’s liquidity reserves totalled €268bn and its liquidity coverage ratio stood at 148% at the end of September 2018.
Deutsche Bank Private & Commercial Bank (PCB) posted a pre-tax profit of €220m for the third quarter of 2018, a 37% slump compared to €349m in the previous year.