Deutsche Bank Settles Postbank Lawsuit, Shares Up 4%

Deutsche Bank announced on August 22, 2024, that it has settled claims with over 80 plaintiffs regarding its acquisition of Postbank, a German retail bank. The settlement, valued at 31 euros ($34.53) per share, allows the bank to release 430 million euros in provisions related to the case. However, a lawyer representing a group of institutional investors indicated that this settlement does not affect other claimants still pursuing their cases against the bank. The litigation stems from allegations that Deutsche Bank underpaid during its multistage acquisition of Postbank, which was completed in 2018. The bank expressed satisfaction with the settlements, stating they significantly reduce the financial risk associated with the ongoing litigation and positively impact its earnings and capital position. Deutsche Bank had previously opted against a second share buyback this year to focus on building excess capital. Analysts from JPMorgan noted that the settlement could enhance Deutsche Bank's common equity tier 1 capital by approximately 10 basis points, which stood at 13.5% at the end of the second quarter. They characterized the settlement as a positive step towards resolving a long-standing legal issue that has persisted for over a decade. Despite the settlement, Jan Bayer, a senior partner at the law firm representing around 50 institutional claimants, stated that his clients have rejected the proposed agreement, indicating that challenges remain for Deutsche Bank in fully resolving the litigation.