Deutsche Bank has signed a binding agreement to subscribe to approximately 265.6 million newly issued shares in Hua Xia Bank for a total subscription price of approximately 349 million.
Deutsche Bank’s subscription is part of a private placement of Hua Xia Bank shares to its three largest shareholders with an overall issuance value of approximately 1 billion. Subject to regulatory approvals, this investment will increase Deutsche Bank’s equity stake in Hua Xia Bank to 13.7% of issued capital from 9.9% previously.
“This additional investment further demonstrates our commitment to Deutsche Bank’s relationship with Hua Xia Bank which has been very positive and with significant potential for further development,” says Rainer Neske, head of Private & Business Clients and a member of Deutsche Bank’s Group Executive Committee.
“Deutsche Bank’s partnership with Hua Xia Bank is an important part of our strategy to secure direct participation in the development of China’s financial services market,” adds Colin Grassie, CEO, Deutsche Bank Asia Pacific.
Deutsche Bank made its first equity investment in Hua Xia Bank in May 2006. In June 2007 both partners successfully started a joint credit card business in China. Deutsche Bank is providing comprehensive technical support and assistance to Hua Xia Bank to further strengthen its existing franchise in areas such as risk management, treasury, retail and corporate banking. Deutsche Bank has two seats on the Hua Xia Bank board.
Hua Xia Bank is the 12th largest bank in China by asset size and listed on the Shanghai stock exchange. With its 9,390 employees and its national banking licence, Hua Xia Bank operates in 287 retail branches in 31 cities throughout China.