Deutsche Bank shares drop on reports of Chinese sell-off

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Shares in Germany's largest lender Deutsche Bank fell more than three percent Friday before recovering slightly, after media reports that major Chinese shareholder HNA would sell off its stake.

The bank's stock was trading down 2.25 percent at 9.54 euros ($11.07) by 2:30 pm (1230 GMT), underperforming the DAX index of blue-chip German shares.

Citing people familiar with the matter, the Wall Street Journal reported that HNA Group --a sprawling conglomerate that expanded from airlines and hotels into holdings in all kinds of businesses worldwide -- will dispose of its roughly 7.6 percent stake in Deutsche.

German business daily Handelsblatt also reported on the plans, citing an HNA employee.

A spokesman for Deutsche Bank declined to comment when contacted by AFP.

Beijing has this year put pressure on HNA to dispose of many of its overseas investments and refocus on its core business, as it battles to cut down the massive debts it accumulated on its global shopping spree.

Plans to scale back were already in place by July, when co-founder Wang Jian fell to his death during a holiday in southern France.

If confirmed, the share sell-off would come at a tricky moment for Deutsche Bank, whose new chief executive Christian Sewing's plans to reform the troubled lender by scaling back some investment banking activities and refocusing on the home market have failed to enthuse investors.

It reported second-quarter profits down 14 percent year-on-year at 401 million euros in July, highlighting progress in slashing its employee headcount and integrating subsidiary Postbank into its retail banking division.

In a further sign of the struggles of traditional German financial firms, Deutsche is set to become the only bank left in the DAX index, with Frankfurt rival Commerzbank edged out by payment processing firm Wirecard.

© 2018 AFP

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