Shares in Germany’s top banks dive after investor sells part of stake

Deutsche Bank and Commerzbank shares dropped, after a major investor sold down its stake in Germany’s two largest publicly listed banks.

An unidentified investor is looking to raise €1.38bn ($1.5bn) by selling 116-million shares in Deutsche Bank, while Commerzbank shares worth €508m are up for sale by an unnamed investor, according to terms seen by Bloomberg.

Deutsche shares dropped as much as 8.3% and Commerzbank stock fell 7.9% when markets opened on Tuesday.

There are currently only two investors in Deutsche Bank that own sufficient shares for such a large sale BlackRock and Capital Group. BlackRock is largely a passive investor and most of its stake is tied to Deutsche’s membership in various stock indices and thus cannot be sold as one.

The sale of major stakes in the two lenders comes just three months after private equity firm Cerberus started unwinding its stakes in the same firms, essentially pulling the plug on an investment that proved a losing bet. It also follows on the heels of the decision by US investment firm Capital Group to pull back from Barclays.

Both Deutsche Bank and Commerzbank are locked in ambitious turnaround programmes to boost their profitability. The prospect of rising interest rates in the eurozone boosted their share prices at the beginning of the year, though the war in Ukraine more recently has cast a shadow over the outlook for the banking industry.

The undisclosed investors offer Deutsche Bank shares at a price range of €10.98 to market price, or the stock’s Monday close of €11.924. Commerzbank stock is being offered at €6.52€7.012. Morgan Stanley is arranging the sales. The holders are exiting their stakes in the two companies, the terms showed.

Spokespeople for Capital and Commerzbank declined to comment.

“We remain confident in our strategy as laid out during our Investor Deep Dive in March,” a spokesperson for Deutsche said. “Our focused business model and risk management capabilities have proven their resilience in challenging times. As we said during our investor day, we have had a promising start into the year and our objectives remain unchanged.”

Stakes are being offloaded in the likes of energy firm EON, Airbus, London Stock Exchange and Glencore.