Shares of Deutsche Bank AG and Commerzbank AG fell after stake sales totaling 1.75 billion euros ($1.9 billion) in Germany’s two largest listed banks.
According to terms obtained by Bloomberg, an unidentified investor in Deutsche Bank sold a 1.27 billion euro stake at a 7.9 percent discount to Monday’s closing price. On Tuesday morning, shares fell as much as 11%.
According to Bloomberg data, there are only two investors in Deutsche Bank who own enough shares for such a large sale at the end of 2021: BlackRock Inc. and Capital Group. BlackRock is primarily a passive investor, and the majority of its stake is linked to Deutsche Bank’s participation in various stock indexes, so it cannot be sold as such.
A simultaneous stake sale in Commerzbank by an unidentified holder raised 475 million euros at a 6.6 percent discount, with shares falling as much as 9.6 percent in early trading. Morgan Stanley arranged both transactions.
Cerberus Capital Management, a private equity firm, began unwinding its stakes in the two lenders three months ago, effectively pulling the plug on an investment that proved a losing bet. Capital Group was previously reported to be behind a Barclays Plc block trade in March by Bloomberg News.
Both Deutsche Bank and Commerzbank have ambitious turnaround plans in place to boost their profitability. The prospect of rising interest rates in the eurozone boosted their share prices at the start of the year, but the war in Ukraine has recently cast a shadow over the banking industry’s outlook.
Capital Group’s spokesperson declined to comment.
“We remain confident in our strategy as laid out during our Investor Deep Dive in March,” said a Deutsche Bank spokesperson. “As we stated at our investor day, we have had a promising start to the year, and our goals remain unchanged.”
“The sale of a shareholding has no effect on our strategy,” a Commerzbank spokesperson said. “The bank’s business model and risk management have proven themselves in difficult times.”
In recent weeks, large stake sales have begun to flood the market, with stock offloaded in companies such as energy firm E.ON SE, planemaker Airbus SE, financial firm London Stock Exchange Group Plc, and mining behemoth Glencore Plc.