HNA takes top stake in Deutsche Bank

FRANKFURT — Chinese conglomerate HNA Group has become Deutsche Bank’s biggest direct shareholder, upping its stake in the flagship lender of Europe’s top economy to just under 10 per cent, according to a US regulatory filing.

HNA’s buy, which one trader said would lift confidence in the lender’s stock, leaves roughly one fifth of the struggling bank in the hands of investors who may be pursuing strategic interests. It comes at a time of heightened uncertainty at the bank, as it grapples with a strategic turnaround, an uncertain global economy and the impact of Britain’s departure from the European Union.

HNA’s stake puts it slightly ahead of Qatari investors. Funds controlled by Qatar’s former Prime Minister Sheikh Hamad bin Jassim Al Thani last year increased their stake, including options, to just under 10 per cent.

The Chinese group has been on an acquisition spree, expanding from its traditional business of aviation and logistics into financial services, betting on asset managers and consumer finance for growth at home and overseas.

It reflects a broader push by China into financial services globally as Beijing encourages its corporate sector to expand overseas, although it faces increased regulatory scrutiny in the United States and Europe. Hefty legal penalties including for the sale of toxic US mortgage debt have hit Deutsche Bank hard and even prompted speculation last year, denied by the bank, that it needed a government bailout.

Last month it asked investors to for an €8 billion cash injection, the fourth such request since 2010, putting it on track to raise more than its entire market value over roughly seven years.