In December last year, Deutsche Bank agreed to sell its entire 19.99% stake in Hua Xia Bank to PICC Property and Casualty Company Limited for a consideration of up to €3.7bn ($4.1bn).
The completion of the transaction was subject to regulatory approvals including that of the China Banking Regulatory Commission.
The lender was quoted by TheStreet as saying: “Deutsche Bank can confirm that the proposed sale of its stake in Hua Xia Bank to PICC Property and Casualty has now received approval from the China Banking Regulatory Commission.
"We are now undertaking the necessary procedures to effect share transfer and complete the transaction in compliance with relevant laws and regulations."
The approval is expected to give much needed boost for the bank to improve its capital position.
Earlier, the bank said that the sale would boost its common equity Tier One capital ratio by 40 to 50 basis points.
The bank made its first equity investment in Hua Xia Bank in 2006.
The sale is part of Deutsche Bank’s restructuring strategy to sell unprofitable and non-core businesses.
In October last year, Deutsche Bank announced that it cut nearly 35,000 jobs and close operations in 10 countries as part of its Strategy 2020 to reduce costs.
It planned to completely close onshore operations in Argentina, Chile, Mexico, Peru, Uruguay, Denmark, Finland, Norway, Malta, and New Zealand.
Last month, the bank entered into an agreement to sell its subsidiaries in Mexico to InvestaBank.
The move to sell Deutsche Bank Mexico and Deutsche Securities is part of its Strategy 2020 plan to rationalize its global footprint.
Image: Deutsche Bank in Beijing – China. Photo coutesy of Deutsche Bank.
