Deutsche Bank Sees Rosy Future in Helping Multinationals Tap Chinese Market

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Alexander von zur Mühlen, Deutsche Bank’s CEO for Asia-Pacific, Europe, Middle East, Africa and Germany. Photo: Xinhua

Deutsche Bank AG sees opportunities in supporting multinationals looking to tap China’s financial market, such as helping them issue panda bonds, the group’s CEO for Asia-Pacific, Europe, Middle East, Africa and Germany said in a recent interview with Caixin.

Deutsche Bank would like to bring more European bond issuers into the market, Alexander von zur Mühlen said. “Investors in China are looking for investment opportunities in the fixed-income space, not just local ones, but also in terms of buying international credit.”

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Deutsche Bank AG sees significant potential in supporting multinationals issuing panda bonds in China, leveraging the country's low-interest rates.
Over 150 billion yuan in panda bonds were issued in 2023, an 82% increase from the previous year, with forecasts expecting a further rise.
In 2023, Deutsche Bank's profit before tax increased by 2% to 5.7 billion euros, supported by a 6% rise in revenue to 28.9 billion euros.

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Who’s Who

Deutsche Bank AG: Deutsche Bank AG sees opportunities in supporting multinationals accessing China's financial market, particularly through issuing panda bonds. The bank aims to attract more European bond issuers and expand its business helping Chinese companies overseas. Deutsche Bank operates in China via a wholly owned bank, a joint venture with Zhong De Securities, and stakes in Harvest Fund Management and Huarong Rongde Asset Management. In 2023, it reported a 2% increase in profit to €5.7 billion and a 6% revenue rise to €28.9 billion.

Bayer AG: Bayer AG, a German pharmaceutical group, has been identified as one of the German issuers that raised funds through panda bonds. Panda bonds are yuan-denominated bonds issued by non-Chinese institutions in the Chinese mainland. Bayer AG is among the European multinationals with strong connections to the Chinese market that Deutsche Bank aims to support in tapping China's financial opportunities.

BASF SE: BASF SE is a German multinational chemical company that has issued panda bonds, which are yuan-denominated bonds sold by non-Chinese institutions on the Chinese mainland. BASF SE is among the German issuers participating in this market, alongside Bayer AG and Deutsche Bank.

Zhong De Securities Co. Ltd.: Zhong De Securities Co. Ltd. is a securities joint venture through which Deutsche Bank operates in China. Deutsche Bank uses this venture to support its business activities in the Chinese financial market.

Harvest Fund Management Co. Ltd.: Harvest Fund Management Co. Ltd. is a mutual fund firm in which Deutsche Bank controls a 30% stake. The company is part of Deutsche Bank's broader operations in China, alongside its wholly owned bank and securities joint venture Zhong De Securities Co. Ltd., and a 40.7% stake in Huarong Rongde Asset Management Co. Ltd.

Huarong Rongde Asset Management Co. Ltd.: Huarong Rongde Asset Management Co. Ltd. is partially controlled by Deutsche Bank, which holds a 40.7% stake in the company. The asset management firm operates within the Chinese market, participating in Deutsche Bank's strategy to support multinationals and Chinese companies in financial markets.

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What Happened When

2023：: More than 150 billion yuan of panda bonds were issued, an 82% jump on the previous year, while the number of sales surged 81% to 94.

2023：: Deutsche Bank’s profit before tax grew 2% year-on-year to 5.7 billion euros ($6.2 billion), while its revenue increased 6% to 28.9 billion euros.

Since last year (2023)：: Deutsche Bank has raised 8 billion yuan ($1.1 billion) through four issuances of panda bonds.

After 2022：: Panda bonds gained traction among global issuers as China’s interest rate cuts lowered the cost of yuan-dominated debt.

By January 2024：: A report published by China Chengxin International Credit Rating Co. Ltd. showed that 150 billion yuan of panda bonds were issued in 2023.

AI generated, for reference only