Deutsche Bank has agreed to sell its 20% stake in China’s Hua Xia Bank to Chinese insurer PICC Property and Casualty for up to RMB25.7bn ($3.9bn) in a bid to boost profitability.

On a pro-forma basis, the transaction is expected to boost Deutsche Bank’s common equity tier 1 capital ratio as of 30 September 2015 by about 30-40 basis points.

The deal is subject to regulatory approvals and customary closing conditions.

Deutsche Bank co-CEO John Cryan said: "We made our first equity investment in Hua Xia Bank in 2006. Since then, we have been pleased with Hua Xia Bank’s development and performance. As we execute on Deutsche Bank’s strategic agenda, now is the right time for us to sell this investment.

"China remains a key growth market for us where, since opening our first local office in 1872, we have helped our clients to achieve their goals."

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