Deutsche Bank shares are lower Friday, amid reports one of its major Chinese shareholders, HNA, is planning to sell its stake in the German Bank. According to the Wall Street Journal, who first reported this news, HNA will sell its 7.6% stake over a period of 18 months.
By 1325 BST, Deutsche Bank shares were 2.63% lower at €9.51. The stock has been broadly flat-to-a-little-lower in recent activity.
Deutsche Bank’s woes continue
Deutsche Bank has had a tough period, with new leadership brought in just this year to ensure the turnaround plan for the German investment bank goes as planned. That has included huge job cuts and other strategy changes.
It now appears that the turmoil the bank has experienced is one reason for its major Chinese shareholder, HNA, to dispose of its stake amid pressure from Chinese regulators over the large amount of foreign investments the conglomerate has made during the past three years.
Deutsche Bank isn’t the only casualty of HNA’s pressured plans to reduce its balance sheet.
The Chinese conglomerate is also reportedly working towards the sale of Ingram Micro Inc., a Californian tech firm it bought just two years ago, among others.
HNA’s Deutsche Bank holdings already shrinking
While HNA remains under pressure to reduce its balance sheet and sell some overseas assets, the reports also state that the Chinese conglomerate’s holdings of Deutsche Bank have already begun to shrink. HNA’s Deutsche Bank stake was previously just under the 10% mark.
While HNA’s decision to sell its Deutsche Bank stake is clearly closely related to the requirements of China’s regulators and also its own company creditors, the poor performance of the Deutsche Bank stock over the past 18 months, likely made it an easier decision to make.
The German Bank’s ratings have suffered this year, with S&P, Fitch and Moody’s all cutting their ratings of various elements of the lender, during June and August 2018.