The head of banking supervision in Germany has said that he welcomes Chinese investment in the banking industry, after HNA Group announced that it has raised its stake in Deutsche Bank to 10%.

Felix Hufeld, president of the Federal Financial Supervisory Authority (BaFin) was speaking at the supervisor’s annual press conference, which came a week after Hainan-based HNA Group announced that it had built up a 10% stake in Deutsche. Back in February HNA initially announced that it had a 3% stake.

Hamburg-based HSH Nordbank is also currently up for sale, and press reports in Germany suggest that both HNA Group and insurance group Anbang have expressed an interest in buying the bank. HSH was one of the world’s biggest ship lenders, and in early 2009 was rescued by two federal state governments with a 13 billion euro bailout. Its balance sheet has since been cleaned up, ahead of a return to the private sector demanded by the European Commission.

Deutsche Bank has been hit by a series of regulatory fines by the US authorities, and is in the midst of a strategic re-organisation to slim down its balance sheet and make its investment banking operations more competitive.

But its share price remains depressed, having fallen from 39 euros in early 2014 to 17.40 euros in early May 2017. Last September it hit a low of only 11.40 euros. Thus HNA may see it as a bottom of the market play. HNA is now the largest single shareholder in Deutsche, which is the biggest bank in Germany. A Qatari fund also owns a stake of just under 10%.

"We believe it is fundamentally positive that capital is being invested in German banks,” BaFin president Felix Hufeld said at the press conference. “This includes foreign capital and of course Chinese capital," he added. "There is no black list of countries that are not allowed to invest with us. In this regard, this is a welcome development."

Last year BaFin allowed Fosun International to acquire the 220-year-old private bank Hauck & Aufhaeuser.

Photo courtesy of Deutsche Bank Flickr.