Deutsche Bank increases investment in Hua Xia Bank

by Richard Kilner

Story link: Deutsche Bank increases investment in Hua Xia Bank

Deutsche Bank has today declared it is to increase its stake in Chinese firm Hua Xia Bank of China from 9.9% to 13.7%.

The original stake was purchased two years ago, and increasing it will cost Germany’s largest bank US$550m.

However, the proposal will require approval from the Chinese regulatory authorities.

Colin Grassie, chief executive officer of Deutsche Bank Asia Pacific, described the firm’s collaboration with Hua Xia as crucial to its intentions to have direct access to China’s financial services market.

Hua Xia has hundreds of branches throughout China, and operates in 31 cities.

China’s lucrative emerging financial services market is highly attractive to foreign investors seeking access to a multi-trillion dollar deposit base.

However, Chinese regulations prevent any one bank from possessing a stake of more than 20%, whilst no Chinese bank can sell more than 25% of itself to any number of overseas investors.