[Reuters] Commerzbank may need 5 bln eur for EBA -sources
[CBKG.DE] FRANKFURT, Nov 22 (Reuters) - Commerzbank <CBKG.DE> may need considerably more capital than previously expected to meet a targeted 9 percent core capital buffer by mid-2012 as demanded by the EU's banking watchdog, several persons familiar with the situation told Reuters. Germany's second-biggest lender could need around 5 billion euros ($6.7 billion), as opposed to a previously expected 2.9 billion euros, should the European Banking Authority (EBA) proceed with plans to tighten further the requirements banks must fulfil to gird themselves against financial headwinds. This is based on internal Commerzbank calculations, the sources said. The EBA's previous 2.9 billion figure was based on data for the second quarter, and the watchdog has since been mulling sharpening its standards even further, given the latest ructions from the euro zone debt crisis . Commerzbank's position has not been made easier by the 700 million euro net loss it incurred in the third quarter. Regulatory sources on Tuesday cautioned that the final capital calculations were still being challenged by national supervisors, including Germany, who say the EBA's latest demands are going too far. Commerzbank, in which the German government owns a 25 percent stake, declined to comment. A significant rise in the capital requirements would put more pressure on Chief Executive Martin Blessing, who has vowed to close the capital gap without again turning to the government for help, as he did during the financial crisis. "I'm not going there again," Blessing told journalists last month. [ID:nF9E7I502M] Meeting a higher capital target would require Commerzbank to intensify its effort to slash risk-weighted assets, allowing it to free up capital, the sources said. The bank has already said it would limit new lending in its main business with small and medium sized enterprises to its core markets of Germany and Poland for the time being. It also said it would end new business financing at real estate unit Eurohypo. The sources said that in addition to these measures, Commerzbank would also drastically cut back its lending to German states and municipalities to help reach the 5 billion euro target.