Deutsche Bank is hardly rolling in it. At the end of the first quarter Frankfurt's finest posted a lower-than-expected core tier one ratio of 7.5 per cent – down 120 basis points from the year-end, thanks largely to its €1.3bn cash acquisition of the wealth manager Sal Oppenheim. Yet the bank will still find another €640m or so to support the capital raising of Beijing-based Huaxia, China's 13th largest lender by assets, taking its stake from 17.2 per cent to 19.99 per cent, the maximum allowable.

Investment in Chinese banks always used to be described in vague strategic terms; Deutsche flannelled about “consumer affluence” and “increasing financial sophistication” when it took its original 9.9 per cent stake almost five years ago. Increasingly, it is about hard numbers. Average return on equity at China's listed lenders was 20 per cent at their last filing – double the average for the world's top 100 non-Chinese banks. Deutsche, for its part, is becoming worryingly exposed to investment banking: its corporate banking and securities division accounted for 93 per cent of pre-tax profit in the first quarter. If you want to make a bigger bet on retail banking, there are few better places than China to do it.

Huaxia will certainly not be the last Chinese lender to raise capital. First-quarter results from the banks showed strong fee momentum and – for now – good asset quality; non-performing loans across the system were a record-low 1.4 per cent at the end of March. The problem is that the banks cannot generate capital fast enough internally to keep up with loan growth. At Huaxia, first-quarter assets rose by 18 per cent year-on-year, while equity rose by 13 per cent. Other foreign bank shareholders will naturally be tapped for funds; if they can increase their exposures along the way, so much the better.