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Deutsche Bank Qatar, China Investors Said to Back Cash Call

  • Qatari royals, HNA said to consider boosting stakes in bank
  • Stock has slumped since share sale plan reported Friday

Qatar’s royal family and China’s HNA Group Co., two of Deutsche Bank AG’s biggest investors, plan to buy shares in the lender’s 8 billion-euro ($8.4 billion) rights offer with a view to increasing their stakes, according to people with knowledge of the matter.

Sheikh Hamad Bin Jassim Bin Jabr Al Thani, former prime minister of the Gulf state, and the former emir of the country, Sheikh Hamad bin Khalifa Al Thani, are considering boosting their current combined holding of less than 10 percent, the people said, asking not to be identified because the information is private. Separately, HNA has a long-term goal of increasing its 3.04 percent holding, two people said. In both cases, no final decision has been made on the final size of the investments.

Deutsche Bank Chief Executive Officer John Cryan, who has spent almost two years navigating legal probes, is tapping investors for funds to rebuild capital buffers dented by litigation costs and regulatory requirements. His latest strategic overhaul, announced Friday, has drawn some investor criticism because it reverses an earlier plan that would have seen the firm raise capital by selling a consumer-banking unit instead.

“The planned participation by some of Deutsche Bank’s biggest shareholders, namely the Qatari royal family and the Chinese group HNA, in the lender’s capital increase is a vote of confidence,” said Neil Smith, an analyst with Bankhaus Lampe who has a buy recommendation on the stock. “I expect the capital increase to go through smoothly.”

Deutsche Bank shares were trading 0.4 percent higher at 9:26 a.m. Thursday in Frankfurt. The stock has dropped about 8 percent since Bloomberg reported Friday that the lender was planning a share sale.

Cryan told Bloomberg TV on Monday that one key stakeholder, which he didn’t identify, had signaled willingness to participate in the share sale. Another large shareholder is undecided about the capital increase and will need convincing, a person familiar with the matter said at the time.

Spokesmen for Deutsche Bank and HNA declined to comment. Representatives for the Qatari sheikhs weren’t immediately available for comment.

The Frankfurt-based bank said last month that HNA, a conglomerate led by aviation tycoon Chen Feng, had become its fourth-largest shareholder. In January, HNA agreed to buy a stake in SkyBridge Capital, the investment firm founded by financier Anthony Scaramucci, an adviser and fundraiser to U.S. President Donald Trump. HNA also operates airlines, hotels and tourism businesses.

BlackRock Inc. holds about 6 percent of Deutsche Bank, according to data compiled by Bloomberg, making it the lender’s biggest individual shareholder.

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