The biggest bank of Germany, Deutsche Bank has declared to raise 9.8 billion euros in new equity as it needs new capital to take over the retail bank Postbank.

The Deutsche Bank has also mentioned about the rights issue and said the takeover of the Postbank would allow the bank expand its business in the housing market of UK. The new capital will also increase the capital reserves of the bank which is demanded by the EU under new regulations for every bank.

Currently the German bank owns one third of the equity in the Postbank. Experts are expecting other banks to raise their capital as it was demanded by the EU.

This is the biggest banking rights issue in Germany but lower than the 12.5 billion euros capital raised by HSBC, Lloyds raised by 13.5 billion euros and RBS raised by 12 billion euros in the UK. The share price of Deutsche Bank fell down on Friday because of the new equity raise issue.

EU is trying its best to help and secure the European banks. First it had conducted stress tests on every bank and now it has advised to raise their capital in order to prevent future crisis.