One of Deutsche Bank’s largest shareholders is reportedly planning to unload the entirety of its stake in the bank.
Reports from both the Wall Street Journal and Bloomberg suggest that Chinese conglomerate HNA is planning to sell its stake in Germany’s largest lender as part of an effort to refocus on its core business after several years of investing heavily in overseas businesses.
HNA currently owns around 7.6% of Deutsche Bank, but as recently as last year that figure was closer to 10%, Bloomberg reported on Friday morning.
At Deutsche Bank’s current share price, that stake is worth roughly $1.7 billion.
“We are committed to streamlining our strategy to focus on our core aviation, tourism and logistics businesses, improve our operations and strengthen our balance sheet,” a spokesperson for HNA told the Wall Street Journal.
HNA’s planned exit will take place over the next 18 months, the Wall Street Journal said.
Bloomberg reports that the move could allow other major investors in the bank, including US-based buyout firm Cerberus Capital, to exert more influence over Deutsche Bank’s business strategy.
The news saw Deutsche Bank’s share price drop, although not significantly, with the stock trading down around 1.9% in Frankfurt, and 2.2% in pre-market trading in New York. The bank’s stock has dropped more than 40% so far in 2018, and 60% since 2015.
HNA’s selling of its stake in Deutsche Bank comes amid a major re-organisation of the German lender after the ousting of CEO John Cryan earlier in the year. Cryan was replaced by Christian Sewing in April.
Soon after his appointment, Sewing announced plans to scale back US operations and cut jobs.
“Even a quick look at the figures makes one thing clear: we have to take action — fast,” Sewing said in a letter sent to staff published by the bank.
As well as thousands of job cuts, the programme has seen the bank stop giving employees free fruit in a bid to cut costs.
Deutsche Bank in February reported a full-year loss of €497 million ($586 million) for 2017, its third straight year of losses.