National Pension Service Exposes 221 Billion KRW to Deutsche Bank

The National Pension Service (NPS) has recently been found to have invested over 220 billion KRW in Deutsche Bank, a German investment bank (IB) currently engulfed in crisis rumors.

According to the 'Deutsche Bank Investment Status Over the Past 5 Years' data submitted by the NPS to the office of Choi Hye-young, a member of the Democratic Party of Korea, as of the end of August last year, the NPS had invested a total of 221 billion KRW in Deutsche Bank, including 61.8 billion KRW in stocks and 159.2 billion KRW in bonds.

Over the past five years, the NPS has steadily increased its bond investments in Deutsche Bank, expanding from 13 billion KRW in 2018 to approximately 159.2 billion KRW last year.

[Image source=Yonhap News]

Stock investments also more than doubled, rising from 25 billion KRW in 2018 to 61.8 billion KRW last year. The NPS explained, "Due to the organization's data disclosure policy, recent holdings are not disclosed; therefore, the data is based on the latest available point six months prior, which is the end of August 2022."

Deutsche Bank's stock price plunged about 14% amid the so-called 'Bankdemic' fear triggered by the collapse of the U.S. Silicon Valley Bank (SVB) and the acquisition issues surrounding Credit Suisse (CS).

During the acquisition of CS by Switzerland's largest bank UBS, Swiss financial authorities fully wrote off 16 billion Swiss francs (approximately 22 trillion KRW) worth of Additional Tier 1 (AT1) capital instruments (also known as CoCo bonds) issued by CS. This raised concerns that Deutsche Bank, which has a high proportion of bond issuance in the international financial market, might face difficulties in capital procurement.

An official from the NPS Fund Management Headquarters stated, "The NPS primarily invests in high-quality overseas companies, and Deutsche Bank is included among the investment targets. Currently, we do not hold subordinated bonds, which rank below stocks, in overseas bonds, and we are monitoring market changes closely while making efforts to manage risks."

This content was produced with the assistance of AI translation services.