HNA Group, one of China’s largest conglomerates and the owner of a $40 billion-plus empire of businesses and company stakes, will be exiting its 7.6 percent stake in Germany’s Deutsche Bank, the Wall Street Journal reported Friday.
The decision, according to people familiar with the matter, comes after pressure from Chinese regulators and HNA’s creditors demanding that it cut down its balance sheet following three years of aggressive foreign acquisitions. The Journal reported that the Deutsche Bank stake will be gradually sold over the next 18 months.
Both HNA and Deutsche Bank declined to comment on the news of the bank holding exit, according to Reuters. A spokesperson for the German bank wasn’t immediately available when contacted by CNBC.
Markets have long been skeptical about the German lender’s future revenue prospects, thanks to widely publicized reports of mismanagement and internal problems with its corporate and investment banking operations. Bank of America Merrill Lynch in mid-August downgraded the stock from a “neutral” to “underperform,” citing very low profitability prospects relative to its competitors.
Deutsche Bank shares were down 1 percent on Friday morning, and have fallen more than 40 percent year-to-date.
Read more on the story at the Wall Street Journal website.
