UK-based hedge fund Marshall Wace has increased its short position on beleaguered German bank Commerzbank as the financial institution announced job cuts of around 10,000.
Marshall Wace increased its short position to 0.72% of the bank’s outstanding shares from 0.63% earlier in the week according to German filings. The price of the shares was not disclosed.
Commerzbank’s restructuring will cost €1.1 billion and it is suspending dividend payments to fund this. The bank only reinstated its dividend payment last year after a long suspension following the financial crisis.
The firm is also shorting Deutsche Bank, Germany’s largest lender, as it comes under increasing pressure from US regulators. However, the fund has reduced its short position to 0.88% of the bank’s shares, having previously held over 1% according to German filings.
The US Department of Justice fined the bank $14 billion for the alleged mis-selling of mortgage-backed securities. However, recent developments suggest that negotiations should bring this fine down considerably.
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