Deutsche Bank has reached settlements with over 80 plaintiffs involved in the litigation over its acquisition of Postbank and the offer price paid to the former Postbank shareholders.
The settlements, which represent nearly 60% of the total claims in the case, are based on an agreed amount of €31 per share, as proposed by Deutsche Bank.
Among those who have settled is the largest individual plaintiff, accounting for approximately one-third of all claims, said Deutsche Bank.
According to the German banking group, the substantial progress in its negotiations with plaintiffs so far will utilise around 45% of the total provisions set aside for the specific claims by plaintiffs, with the remaining provisions to be released.
Deutsche Bank expects the settlement to have a positive impact of roughly €430m on the bank’s pre-tax profit in Q3 2024.
The German lender also stated that additional settlements with other plaintiffs could lead to further positive adjustments to the provisions related to the litigation.
Deutsche Bank has been quoted by Reuters as stating: “Against the backdrop of this improvement to our capital plan, we will review our distribution plans and discuss these with our regulators as part of our ongoing dialogue.”
The legal disputes alleging that Deutsche Bank underpaid former Postbank shareholders during its 2010 acquisition have been ongoing for years in the courts without resolution.
In April 2024, the litigation escalated significantly when the Higher Regional Court of Cologne appeared to show support for the former shareholders’ claims.
In response to this development, Deutsche Bank made a provision of €1.3bn to cover any potential payouts to the plaintiffs.
Last month, Deutsche Bank reported a net attributable loss of €143m for the second quarter of 2024 (Q2 2024) that ended 30 June 2024, compared to a net profit of €763m in the same quarter in 2023. The Postbank litigation provision drove the loss.
The lender’s total net revenues were €7.6bn for Q2 2024, a 2.4% increase compared to €7.4bn for the same quarter of 2023.
