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London hedge fund bets big against Commerzbank

Billy Bambrough
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Commerzbank's four year plan involes digitisation and automation of workflows
Commerzbank's four year plan involes digitisation and automation of workflows (Source: Getty)

Marshall Wace – a London-based hedge fund – has revealed a multi-million euro bet that shares in Germany’s second largest lender Commerzbank will fall.

German filings showed the fund’s short position increased to 0.72 per cent of the bank’s outstanding shares, up from 0.63 per cent earlier in the week.

The price at which the shares were sold was not disclosed. A short position means an investor bets the share price will fall by selling borrowed shares.

Read more: Commerzbank ploughs more cash into London fintech startup Iwoca

Shares in the bank closed down one per cent in Frankfurt.

Commerzbank announced the latest stages of its business overhaul last week, slashing almost 10,000 jobs and halting dividend payouts.

The lender is looking to focus on digitisation and automation to boost efficiency over the next four years.

Marshall Wace is also shorting Germany’s biggest lender, Deutsche Bank.

Read more: Is Deutsche Bank the world’s greatest contrarian trade?

Deutsche has come under pressure in recent weeksdragging down bank shares across Europe – after the US Department of Justice fined it $14bn (£11bn) for mis-selling mortgage-backed securities.

It’s expected the fine will be negotiated lower however.

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