Deutsche Bank AG (DB) - Get Report stock fell sharply in Frankfurt Monday after Europe's biggest bank confirmed it will raise around €8 billion ($8.5 billion) in capital from shareholders and plan the partial sale of its asset management business.

Deutsche Bank shares fell more than 7%, or €1.37, in early trading before paring the loss to around 5.5% and were changing hands at €18.20 each by 08:30. GMT. The stock, however, has been one of the best performing bank shares in Europe in the second half of 2016, rising more than 78% from its all-time low in September and gaining more than 38% since the U.S. elections in November compared to a 12.18% advance for the Stoxx 600 Europe Banks Index.

"We had been listening to feedback from the market that we still didn't have enough capital," CEO John Cryan told CNBC Europe television when asked for the rationale behind the timing of the capital raising. "We had a big buffer over regulatory minimum, but our costs of (debt and equity) capital were still quite high."

"Also, we'd been thinking about what to do with PostBank, and we needed equity it we wanted to retain it," he added. "The two came together and it seemed like the right time to do it."

Germany's largest lender will sell around 687.5 million new shares in a plan that, if approved by the country's regulator, will begin on March 21 and run through April 6. The new shares will be sold at a discount of around 29% to Friday's €19.25 closing price, but Cryan defended the seemingly steep discount.

"It's a discount that's not too wide to the theoretical ex-rights price," Cryan said "But it's a heavy rights issue -- one new share for every two held -- so I think it's priced just about right ... [but] we should be less concerned about the level of the discount and more about the adequacy of the proceeds."

The bank also said it will sell around €80 billion in legacy assets from its Global Markets division and look to the partial spin-off of its Deutsche Asset Management Unit within the next two years.

"We don't believe that division gets recognition when the market looks at the bank, and recognition is important," Cryan said when asked why he seemed to reconsider the partial sale of the unit. "Also at some stage in the future, although not now, it will provide that business with an acquisition currency."

The bank also set new near-term financial targets, including a post-tax return on tangible equity of around 10% under normal conditions and a "competitive dividend payout ratio for fiscal year 2018 and thereafter."

The confirmation followed a wild day of trading for Deutsche Bank shares Friday after reports it was looking at capital raising options, falling as much as 4% before rallying to close at €19.25 each, a small 0.69% decline from Thursday's close.

Deutsche Bank said Sunday that its PostBank operations, a retail-focused division that offers services in Germany through the country's network of post offices, will be retained and integrated "with the Bank's existing German private and commercial banking and wealth management businesses." Last year, PostBank earned €367 million pre-tax on €3.366 billion in revenues.

The Frankfurt-based lender has a core capital ratio (CET1) of 11.9% as of the end of 2016, up 80 basis points from the previous year and that its overall risk-weighted assets fell €39 billion to €358 billion.

Last October, Cryan said the bank was conducting a review of the asset management arm, which generated around €3 billion in revenues last year but posted a full-year pre-tax loss of €204 million.

"With a partial IPO the bank aims to unleash growth in Deutsche Asset Management's active, passive and alternatives business lines while accentuating the division's fiduciary role," Cryan said Sunday. "The additional operational independence will help to attract further talent in the future. Deutsche Asset Management, with more than 700 billion euros of invested assets worldwide, is planned to be headquartered and listed in Germany."