Deutsche Bank buys 265.6 mln more shares of Hua Xia Bank

Deutsche Bank AG, a leading global investment bank, has signed an agreement to buy about 265.5 million new shares of China's Hua Xia Bank<600015> for RMB 3,909 million (US$550 million), the German lender announced yesterday.

Deutsche Bank's stake in the Beijing-based bank will be raised to 13.7% from the current 9.9% after the purchase. However, the deal is still subject to regulatory approval.

Hua Xia Bank intends to issue new shares worth of RMB 11.6 billion (US$1.6 billion) to its three largest shareholders, and Deutsche Bank's subscription is part of the private placement plan.

Deutsche Bank bought the 9.9% stake in Hua Xia in May 2006, and now has two seats on the Chinese lender's board.

"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," said Colin Grassie, chief executive officer of Deutsche Bank Asia Pacific.

Listed in Shanghai in September 2003, Hua Xia Bank is the 12th largest bank in China in terms of assets and it is also the fifth listed bank in China.