Deutsche Bank shares hit 14-month high on new US shareholder

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Deutsche Bank CEO Christian Sewing speaks to the media during the bank's annual press conference to discuss financial results for 2019 on 30 January, in Frankfurt, Germany. Photo: Thomas Lohnes/Getty Images

Shares in Deutsche Bank (DBK.DE) surged on Thursday after a major US asset manager bought a chunk of the business.

Deutsche Bank’s stock jumped just over 9% in Frankfurt after disclosures showed LA-based Capital Group had built up a 3.1% stake.

Asset manager Capital Group is one of the world’s largest investment companies, with $1.7tn (£1.31tn) of client funds under management. A spokesperson for Capital Group declined to comment on the investment.

Filings show Capital Group’s position was built up on 31 January, just a day after Deutsche Bank reported full year results. The numbers showed Deutsche Bank lost €5.3bn last year, more than analysts were expecting, as the costs of its ambitious turnaround plan ate into earnings.

However, revenue was slightly higher than expected and chief executive Christian Sewing said: “Our new strategy is gaining traction.”

READ MORE: Deutsche Bank to axe 18,000 jobs and exit stock trading

Sewing is piloting a sweeping transformation at the bank, which involves pulling out of share trading and focusing on more traditional commercial banking. The plan, announced last July, involves axing around 18,000 staff. Management hope the retrenchment and focus on more successful parts of its business will reverse the long-term share price decline Deutsche Bank has seen since the financial crisis.

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Thursday’s stock price surge took Deutsche Bank’s shares to their highest level since the end of October 2018.

Banking stocks rose across Europe on Thursday, with the MSCI European Financials ETF (EUFN) up 1.4%. Rising banking stocks helped push European stocks to new highs.

Aside from Deutsche Bank, one of the best performing European banks was Italy’s UniCredit (UCG.MI). The lender reported fourth quarter results that were better than market expectations and shares rose 5.8% in Milan.