IKB Deutsche Industriebank, hit by the sub-prime crisis, has said it expects to cut the value of its investments by another 500m euros ($794m; £397m).
It has also lined up 1.5bn euros from main shareholder KfW, the German state development bank that led IKB's rescue.
IKB has been given 8bn euros in payouts since losing billions on investments in assets backed by risky US home loans.
KfW is seeking a buyer for IKB, and will provide the 1.5bn euros to keep the bank running until later this year.
As part of its longer-term rescue plan, KfW is taking the lead in organising a 1.25bn euro capital increase for the bank.
But before any injection of cash is made, the European Union has to rule on whether the move is state aid. Its decision is expected by October at the latest.
Like many other banks, IKB bought financial products backed by mortgages given to US homeowners with poor credit histories.
Many of those homeowners are now struggling to pay the interest on those loans.
That has left banks holding assets that are either worthless, or very difficult to value.
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