HNA’s holding in Germany’s biggest bank rose to 9.92%, according to a regulatory filing on Tuesday by investment entities acting on HNA’s behalf. The conglomerate initially reported a 3% stake in Deutsche Bank in February, saying at the time that it may increase its holding, while intending to remain below 10%. It disclosed a stake of almost 4.8% in March.
Deutsche Bank chief executive officer John Cryan is focusing his attention on returning the lender to growth after grappling with losses resulting from legal probes and misconduct charges. Last month, the bank sold €8bn ($8.8bn) of new shares to bolster capital after abandoning an earlier plan to sell its Postbank unit.
“An anchor investor is positive for Deutsche Bank at this juncture,” said Michael Huenseler, a fund manager at Assenagon Asset Management, which owns the bank’s stock. “The concentration of share holdings among larger investors is not a problem.”
Led by billionaire Chen Feng, 63, HNA has been on a buying spree, acquiring stakes in Swiss duty-free operator Dufry AG, Singapore-based logistics provider CWT Ltd and hotel operator Hilton Worldwide Holdings Inc. The Chinese firm was reported to have bid for HSH Nordbank, a regional bank in Germany, and earlier this year took a stake in asset manager SkyBridge Capital through HNA Capital, which has ambitions of becoming a global investment bank and financial-services provider.
HNA’s voting rights in Deutsche Bank are formally held by a vehicle structured by Austrian asset manager C-Quadrat Investment AG. Alexander Schuetz, the CEO of C-Quadrat, has been nominated to join Deutsche Bank’s supervisory board after a confirmation vote of the bank’s annual general meeting on May 18.
Spokesmen for Deutsche Bank and C-Quadrat declined to comment. HNA’s holding surpasses BlackRock’s 5.9% investment, which had been the largest single stake reported in Deutsche Bank, according to data compiled by Bloomberg.
Deutsche Bank fell 0.3% to €16.63 at 11:04 am in Frankfurt trading yesterday. It has gained 8% this year and is up 77% from a low reached in September.
The Chinese conglomerate has spent $30bn on deals over the past year. Last month, HNA agreed to purchase 16.8% of Dufry, a stake with a market value of about 1.44bn Swiss francs ($1.5bn).
Chen, who two decades ago walked the aisle of his startup Hainan Airlines Co’s lone airplane serving refreshments, has struck deals from Australia to Switzerland in the past two years as he expands his empire beyond aviation and hotels. In 1995, Chen flew to New York and persuaded George Soros to invest $25mn in his fledgling airline, which now has a market value of $8.1bn.