FRANKFURT — Deutsche Bank, the largest German bank, said on Sunday that it would raise roughly $11 billion in new capital from existing shareholders and the royal family of Qatar, responding to regulatory pressure on banks to reduce risk.
Deutsche Bank said it had sold new shares worth 1.75 billion euros, or $2.4 billion, to Paramount Holdings Services Ltd., an investment vehicle owned by Sheikh Hamad bin Jassim bin Jabr Al-Thani of Qatar. The remaining €6.3 billion will be raised from existing shareholders in a rights issue likely to begin on June 24, Deutsche Bank said.
The measures will help answer persistent criticism that Deutsche Bank, which has the biggest investment banking operation among European banks, presents a risk to the financial system because it does not have enough capital to absorb potential losses.
But the capital increase, approved by the Deutsche Bank supervisory board at a meeting Sunday, may be less welcome among shareholders. The additional 360 million shares will dilute the value of the holdings of existing Deutsche Bank stock. The bank will hold its annual shareholders meeting here on Thursday.
The additional capital could also take a toll on earnings. In its statement issued Sunday, Deutsche Bank pushed back some of its profit targets by a year. The bank said it expects to report a 12 percent return on equity, a common measure of bank profitability, in 2016 rather than 2015.
While additional capital makes a bank less risky, it also means the bank operates with a greater proportion of its own money, which tends to reduce the profit margin. Deutsche Bank said Sunday that, if it has excess capital in the future, it would return the money to shareholders in the form of a dividend.
All banks in Europe are under pressure from regulators to raise capital so that they are more impervious to financial shocks. Deutsche Bank, the largest European competitor to Wall Street giants like JPMorgan Chase and Goldman Sachs, has often faced criticism that it is thinly capitalized compared with other large banks. Deutsche Bank managers consider the criticism unfair.
After the capital increase, Deutsche Bank’s common equity Tier 1 capital ratio, a measure of a bank’s ability to absorb losses, will rise to 11.8 percent from 9.5 percent at the end of March. The ratio was less than 6 percent in mid-2012, according to the bank.
“We are decisively strengthening our capital, further improving our competitiveness, and investing in targeted growth initiatives across our core businesses,” Jürgen Fitschen and Anshu Jain, co-chief executives of Deutsche Bank, said in a statement.
The bank also announced new investments intended to speed up growth, such as hiring additional senior managers in the United States.
“The package of measures we are announcing today represents a decisive response to both the challenges and the opportunities in a changing macroeconomic, competitive and regulatory environment,” Mr. Jain and Mr. Fitschen said.
The capital increase is subject to approval by German bank regulators.