Deutsche Bank (DB) - Get Free Report shares were marked higher in Frankfurt Monday following a weekend report that suggested Qatar's multi-billion sovereign wealth fund was preparing to increase its stake in Germany's biggest lender.
Bloomberg reported Saturday that the Qatar Investment Authority was in "advanced" talks with Deutsche Bank to boosted its current holding, estimated at around 6.1%, while noting that the timing of such an increase was uncertain. Last year, the QIA said it would invest around $10 billion of its $320 fund in German, while the fund's chairman, Sheikh Mohammed bin Abdulrahman Al Thani, hinted last week at the World Economic Forum in Davos that financial services firms could be potential targets.
Deutsche Bank shares were marked 0.55% higher in the opening hours of trading in Frankfurt, compared to a 0.3% decline for the benchmark DAX performance index, and changing hands at €8.18 each, a move that still leave the stock nursing a 47.5% decline over the past year.
Deutsche Bank has also been at the center of ongoing speculation that the government may direct it to merge with smaller rival Commerzbank Bank AG (CRZBY) in order to strengthen the balance sheets of both banks and allow for a more stable base of lending to Germany's small and medium sized companies -- known as the mittelstand -- which are the lifeblood of Europe's biggest economy.
However, Germany's powerful Verdi Union has said such a tie-up would result in massive job losses, and its leader, Frank Bsirske, who also sits on Deutsche Bank's supervisory board, said last week that merger plans were not the near-term focus of the bank.
Deutsche Bank has been hammered by a series of negative headlines and scandals over the past years, the latest linked to European antitrust regulators charging four regional lenders with taking part in a bond trading cartel that lasted at least seven years.
The European Commission did not name the banks alleged to have participated in the alleged cartel, and Deutsche Bank said it would not comment on the ongoing probe even as it said it was proactively co-operating with regulators.
The EU probe, should it include Deutsche Bank, would be the second major headline risk to hit the bank's shares in as many months, following news that prosecutors and tax inspectors raided its Frankfurt headquarters as part of an ongoing probe into money laundering allegations linked to the publication of the Panama Papers.
The raid, which also included the offices of all of Deutsche Bank's board members, according to a Reuters report, is said to be focused on two unnamed bank employees alleged to have assisted clients in hiding money offshore between 2013 and 2018.
It also followed an allegation that Deutsche Bank was the unnamed "major European bank" that helped process around $150 billion in payments linked to the Danske Bank money-laundering scandal that was revealed earlier this year.
"As far as we are concerned, we have already provided the authorities with all the relevant information regarding Panama Papers," Deutsche Bank said in a statement provided to TheStreet at the time. "Of course, we will cooperate closely with the public prosecutor's office in Frankfurt, as it is in our interest as well to clarify the facts. In recent years, we have proven that we fully cooperate with the authorities - and we will continue to do so."
The twin headlines are the latest turmoil to sweep across Germany's largest lender, which has lost more than two thirds of its market value since asking investors for an $8.5 billion capital increase in March 2017 following a multi-billion settlement with U.S. legal authorities linked to the mis-selling of mortgage bonds in the run-up to the global financial crisis.