Deutsche Bank AG (DB) shares reversed steep early loses in Frankfurt trading Wednesday, rising to a three-and-a-half month high after it said that Cerberus Capital Management had taken a stake in Germany's biggest lender.

The German business daily Handelsblatt first reported Wednesday that the private equity group now own 3% of Deutsche Bank, adding to its financial sector exposure in Europe's largest economy where it has a 5.01% holding in rival Commerzbank AG (CRZBY) . Officials at Deutsche Bank were not immediately available for comment when contacted by TheStreet but the holding was confirmed in a German securities filling shortly after.

Deustche Bank shares, which had slumped as much as 3.2% from Tuesday's closing price in early Frankfurt trading, were marked 1% higher at €15.60 each -- the highest since July 27 -- by mid-day as news of report worked its way through markets before paring gains to €15.52 each.

The Cerberus stake, spearheaded by Stephen Feinberg, adds to the lender's increasingly diverse base and follow reports of a rift between CEO John Cryan and chairman Paul Achleitner over a meeting with the bank's biggest investor and the overall strategy of Germany's biggest bank.

In fact, only yesterday it revealed a 6.68% voting stakebuild from U.S. investment bank Morgan Stanley (MS) , although much of that holding was established through options, swaps and other equity derivatives.  

HNA Group Co, a China-based investor that holds a 9.9% stake in Deutsche Bank through an Austrian asset management firm based in London, has reportedly sought a face-to-face meeting with Cryan on two occasions, Bloomberg news has reported in September, while the Wall Street Journal has suggested the Cryan and Achleitner are at odds over the relationship between the bank and its biggest shareholder.

The Qatari Royal Family and investment group Blackrock also hold major stakes in the bank, which is the second-largest in Europe.

Deutsche posted a doubling of net income to €649 million that soundly beat analysts' expectations in the three months ending in September, but it also said trading was down 30% from the same period last year and reported a 10% decline in overall revenues. 

The German lender fared much worse than the five biggest U.S. investment banks reporting a 16% fall in equities revenues and a 36% fall in fixed income revenue compared with the same time period last year. U.S. banks reported an average 2% rise in equities revenues and a 22% fall in fixed income.

The Stoxx Europe 600 Banks index, the region's benchmark for financial sector shares, has retreated some 5.8% over the past six months on the back of speculation that the European Central Bank may not slow process of monetary policy tightening in the months ahead.

Deutsche Bank, however, has fallen further, losing 11.5% over that same period amid concerns over its newly-drafted business strategy, spearheaded by Cryan, and the strength of its balance sheet after an $9 billion capital injection earlier this year.

More from Markets

Rewind: Jim Cramer on the Market Selloff, Macy's, Constellation and Canopy

Rewind: Jim Cramer on the Market Selloff, Macy's, Constellation and Canopy

Loncar China BioPharma ETF Makes Nasdaq Debut

Loncar China BioPharma ETF Makes Nasdaq Debut

Stocks Close Lower But Trim Losses With Late Rebound

Stocks Close Lower But Trim Losses With Late Rebound

China Set to 'Weaponize' Yuan to Fight Trump's Trade War: Report

China Set to 'Weaponize' Yuan to Fight Trump's Trade War: Report

Jim Cramer on Canopy Growth's New $4 Billion Stake From Constellation Brands

Jim Cramer on Canopy Growth's New $4 Billion Stake From Constellation Brands