The U.S. private-equity firm is selling about 21 million shares out of around 62 million it owns at Deutsche Bank, and 25 million out of 63 million it holds at Commerzbank. Cerberus bought both stakes in 2017, becoming one of the biggest backers of both banks. It owned 3% of Deutsche Bank and 5% of Commerzbank. The firm’s thinking was that it could make money in the profit-starved banking landscape as economic growth picked up, among other factors. Europe’s recovery has been anemic, and the German financial system is in many ways stacked against banks making money. Commercial banks such as Commerzbank, the second largest after Deutsche Bank, compete against state-owned landesbanks and savings banks that offer cheap loans to consumers and businesses, with less pressure to make a profit.
Since Cerberus’ stake in Commerzbank was disclosed in July 2017, the German bank is down 31%, compared with the Stoxx 600 Banks index’s decline of 18%. Deustche Bank’s shares are down 21% since November 2017, compared with the Stoxx 600 Banks index’s decline of 14% over the same period. The move by Cerberus to sell some of its stakes in the banks follows the departure of Matt Zames as president of Cerberus last year. He oversaw the firm’s investments in the financial-services sector. With Deutsche Bank, Cerberus took on the unusual role of becoming a paid adviser to the bank. That put Mr. Zames in the position of both trying to fix Deutsche Bank, which had been suffering from years of losses, restructuring, legal fines and management turnover, and attempting to salvage Cerberus’s investment. Cerberus’s stake in Deutsche Bank was worth less than half of what it paid by the time its advisory relationship with the bank ended in 2019.