Deutsche Bank will be divesting 13.84% of its share in Malaysia’s investment bank K&N Kenanga Holdings.
It will sell 4.9% of its stake to Tokai Tokyo Financial Holdings which is a Japan-based investment banking group that provides equity broking, asset management and wealth management solutions, reports The Star.
Tokai has affiliate partners in the US, Hong Kong, Singapore, the Philippines and now Malaysia.
Deutsche Bank had acquired a strategic stake in the Malaysian bank when it bought 30% of its shares from John Hancock International Holdings.
The current divestment is just the beginning as the bank considers further divestments in the region, with Singapore-based DMG & Partners Securities under its scanner in which it holds a 51% stake.
Speaking about the transaction to The Star, K&N Kenanga group managing director Datuk Chay Wai Leong said: "This is a follow-up of a business co-operation agreement with the broker from Japan that we signed earlier. Unlike other agreements, this has concluded with Tokai Tokyo taking up a stake in K&N Kenanga.
"Our strategy to grow is through strategic alliances with partners in other countries. The cost is lower and more effective compared with opening up small offices in other countries."
The bank is selling its minority stake in small financial institutions to optimize its capital structure under the Basel III regulations that requires banks to hold capital for minority stakes in other financial institutions.
As part of this, Deutsche Bank is also said to be reviewing its stake in Chinese lender Hua Xia.
Image: Deutsche Bank is considering selling its minority stake in financial institutions to follow the Basel III regulations. Photo: courtesy of twobee/freedigitalphotos.net.