Frankfurt - Shares in Germany's second biggest bank Commerzbank AG plummeted more than 14 per cent Friday after the government said it was part nationalizing the Frankfurt-based bank to help shore up its finances in the face of the global economic crisis.

Commerzbank shares have come under pressure in recent weeks with the German Government's announcement that it was planning to hold a 25-per-cent plus-one-share stake in the bank coming in the wake of market speculation that it needed fresh capital to boost its balance sheet.

Shares in giant German insurer Allianz AG, which is selling its troubled banking offshoot Dresdner Bank to Commerzbank, jumped by 3.2 per cent to 68.93 euros Friday, after posting a steep decline Thursday in the wake of the government's announcement.

As part of the government bail-out, Commerzbank is to receive a 10-billion-euro (13.56-billion-dollar) capital injection from the bank rescue fund set up Berlin to help the nation's finance sector limp through the current international financial upheaval.

Commerzbank's 10-billion-euro capital injection is in addition to the 8.2 billion euros the bank received in November and would help it to finalize its 5.1-billion-euro takeover of Dresdner, Commerzbank chief Martin Blessing said.

In early morning trading Friday, Commerzbank shares were down 14.3 per cent at 4.55 euros after ending Thursday 13.8 per cent lower at 5.36 euros.

Allianz shares also slumped Thursday to close 8.84 per cent down at 64.27 euros.

The German Government's announcement that it was throwing Commmerzbank a lifeline is a further sign of the deterioration in the global financial sector, in particular since September, when Commerzbank unveiled its takeover for Dresdner.

Several leading European banks have been warning that their earnings were likely to be have been badly hit by the big sell-off in global shares that emerged in the fourth quarter.

On Friday, Germany's retail bank Deutsche Postbank AG stock dropped almost 4 per cent after it also warned it expected to post a big loss in 2008.

This in turn sent shares in Deutsche Bank AG falling by more than 4 per cent. Deutsche, which is Germany's biggest bank, is currently taking a 30-per-cent stake in Postbank. (dpa)