Deutsche Bank sees €430 million gain on Postbank progress

Deutsche Bank AG said it expects a €430 million ($480 million) boost to its third-quarter results after making “significant progress” in talks over the majority of claims in the Postbank AG litigation.

The German lender reached agreements with more than 80 plaintiffs, representing almost 60% of the total claims, according to a statement late Wednesday. The settlements — struck at €31 per Postbank share — represent about 45% of the provisions it booked against those claimants and include the largest individual plaintiff in the proceedings, representing about a third of all the claims.

Deutsche Bank set aside a €1.3 billion provision in April after an appeals court warned that it may rule against the bank in the long-standing dispute, pushing it into its first quarterly loss in four years and prompting it to hit pause on share buybacks.

What Bloomberg Intelligence Says

While uncertainty remains, Deutsche’s settlement with more 60% of claimants — with a more favorable outcome than previously expected — could signal more capital coming back to shareholders. We expect the lender to stay conservative with buybacks for now, but upside potential awaits in late 2024 to early 2025.

Alison Williams, BI analyst

The lender said the remaining provisions related to the settling plaintiffs will be released and should boost pretax profit by €430 million in the third quarter. Analysts were predicting pretax income of around €1.8 billion for the period as of mid-August, according to data compiled by Bloomberg.

The Postbank hangover is one of Deutsche Bank’s longest-running legal issues, with claimants alleging that the lender was required to offer a higher price to shareholders in rival Postbank when it made a successful takeover bid in 2010.

At the time, Deutsche Bank offered €25 euros per Postbank share, but claimants say it should have offered €57.25, the price of the stock when it first bought into the competitor in 2008. Some investors have sued for compensation of as much as €64.25 per share, with a lawyer for a small group of ex-shareholders dismissing an offer of €36.50 a share last week as “dead on arrival.”