(WSJ) Shares of German’s lenders Deutsche Bank and Commerzbank fell more than 8% each on Tuesday as investors downsized holdings.
Investors reportedly sold 5% stakes in both lenders at proceeds of around 1.75 billion euros or $1.9 billion.
Investors are concerned that the Ukrainian war, coupled with high inflation, could impact Germany’s lenders’ profitability. Both lenders had disclosed limited exposure to Russia, while Germany’s reliance on Russian oil and gas has raised economic growth concerns.
Germany’s biggest banks have also been hit by the negative interest rate amid a highly competitive banking sector in the country.
Regulatory penalties have also been inflicted on German lenders, with the banks trading at a fraction of their book value per share compared to the US rivals, which trade above the book value.
The stake exits happen after investors grabbed the stocks in 2020 to capitalize on Covid-19 induced discounts as they bet on a speedy recovery.
DBK: ETR is down -8.03%, CBK: ETR is down -8.36%
