U.S. investor Capital Group Cos. has raised its stake in Deutsche Bank AG , sounding a rare note of confidence in prospects for the troubled European banking sector.
The asset manager, which has over $1.7 trillion under management, held a 3.61% stake in Deutsche Bank AG through one of its funds as of Oct. 6, according to a securities filing Tuesday. That is up from 2.6% in March, said a person familiar with the matter.
A Deutsche Bank spokesman late Tuesday said that “based on further information received from our shareholder,” it wanted to clarify that Capital Group had increased its stake but that its overall investment hadn’t gone over 5%.
He said the bank doesn’t know how much Capital Group owns in total, and the stake and other, previously disclosed holdings couldn’t be added together, which would have taken Capital Group to 7.35% ownership.
Capital Group is backing the sector at a difficult time. Deutsche Bank is undergoing a turnaround plan involving cutting costs, scaling back its U.S. operations and shedding risky assets. The European banking sector faces structural hurdles, including perennially low interest rates, a pileup of bad loans and a negative economic outlook, and banks have been considering consolidation.
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