The price reaction was clear on Tuesday: the Deutsche Bank share temporarily lost almost 11 percent in value, the Commerzbank title almost 10 percent.

The significant price losses were triggered by the sale of blocks of shares each amounting to 5 percent.

The sales volume totaled EUR 1.75 billion, of which EUR 1.27 billion was for Deutsche Bank shares and EUR 475 million for Commerzbank shares.

Markus Fruehauf

Editor in Business.

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Among the shareholders of the two big banks, only two investors are suitable for such large investments: Blackrock or the Capital Group, both investment companies from the United States.

Although the name of the seller has not yet been publicly confirmed, in financial circles Capital Group was believed to be the seller.

Because Blackrock traditionally holds large shares in stock corporations, because the asset manager has to underpin his extensive business with index funds (Exchange Traded Funds, ETF), which reflect indices such as the Dax (Deutsche Bank) or the M-Dax (Commerzbank).

It is the second exit of a major investor from the two largest German private banks within a short period of time.

In January, Cerberus reduced its stake in Deutsche Bank from 3 to 2 percent and in Commerzbank from 5 to 3 percent.

The most recent sale of shares is disproportionately higher at 5 percent each and explains the violent price reaction.

While Cerberus had to record significant losses after its entry in 2017, the Capital Group's balance sheet is better with its Deutsche Bank and Commerzbank packages.

The Los Angeles-based investment company acquired a 3.1 percent stake in Deutsche Bank in February 2020 and increased this stake to 5.8 percent in November 2021.

The asset manager has held around 5.3 percent of Commerzbank since September 2020.

Thereafter, the position is said to have been slightly expanded without the hurdles at which voting rights notifications become necessary being exceeded.

The American investment bank Morgan Stanley has been commissioned to sell the two blocks of shares.

116 million Deutsche Bank shares were placed at a price of EUR 10.98.

The 72.5 million Commerzbank shares were sold at a price of EUR 6.55.

The prices of the two major banks were lower when the Capital Group entered the company, so that the commitment should have paid off overall.

On Wednesday afternoon, Deutsche Bank's share price was still well below the placement price at EUR 10.91.

The situation was similar at Commerzbank with a price of 6.47 euros.

Doubts about European stocks

While Cerberus had bet on bank mergers with its commitment, the motive of the Capital Group was more likely to have been the possible price gains.

In fact, in the first few weeks of the year, European bank stocks were able to benefit from the rise in interest rates triggered by concerns about inflation.

But the Ukraine war threw a spanner in the works: on the one hand, banks in particular are subject to the strict sanctions in the financial sector, and on the other hand, the measures taken against Russia in the energy sector could have a negative impact on the European economy.

The Ukraine war weighs more heavily on the European stock markets than, for example, the American stock exchanges.

In the past few weeks, there have already been sales of blocks of shares in European companies.

These included the utility Eon, the aircraft manufacturer Airbus,

Capital Group is the fourth largest private equity firm in the world with $2.7 trillion in assets under management.

Ahead are only Blackrock ($10.0 trillion), Vanguard (8.5), and Fidelity (4.1).

A well-known fund of the Capital Group is the Europacific Growth Fund, which manages 164 billion dollars and focuses on investments particularly in Europe.

The fund has lost almost 15 percent of its value this year.

The Capital Group also holds larger stakes in other German companies: These include the engine manufacturer MTU Aero (9.9 percent), the pharmaceutical and laboratory supplier Sartorius (7.9 percent), the sports goods group Adidas (3 percent) and the reinsurer Munich Re (3 percent). ).

Banks stick to their strategy

Neither Deutsche Bank nor Commerzbank wanted to comment on the seller of the blocks of shares.

However, both institutes are not deterred by the sale of shares and the severe price setback on their way.

Deutsche Bank remains confident in its strategy, which it outlined during Investor Day in March, a spokesman said.

“Our focused business model and risk management have proven their resilience in difficult times.

As we said at our investor day, we had a promising start to the year and our goals remain unchanged,” he added.

A Commerzbank spokeswoman said: "The sale of a shareholding does not change our strategy.

The bank's business model and risk management have proven themselves in challenging times."