Kapitalstärkung

Kapitalstärkung, often translated as capital strengthening or capital enhancement, refers to measures taken by a company to increase its equity capital. This can be achieved through various means, such as issuing new shares, retaining profits instead of distributing them as dividends, or converting debt into equity. The primary goal of Kapitalstärkung is to improve a company's financial health, making it more resilient to economic downturns and better positioned for future investments and growth.

A stronger capital base generally enhances a company's solvency and liquidity. It provides a buffer against potential losses and reduces reliance on external financing, such as loans. This improved financial standing can lead to a better credit rating, lower borrowing costs, and increased investor confidence. For financial institutions like banks, Kapitalstärkung is particularly crucial as it directly impacts their ability to lend and their regulatory compliance, ensuring they can absorb potential financial shocks.

The decision to pursue Kapitalstärkung often arises when a company faces significant expansion plans, anticipates challenging market conditions, or needs to meet regulatory requirements. While increasing equity capital is generally seen as beneficial, it can also dilute existing shareholders' ownership stakes if new shares are issued. Companies must carefully weigh the advantages of a stronger capital base against potential dilution and other implications for their financial strategy.