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Deutsche Bank said it had reached settlements with 60 per cent of claimants in the more than decade-long Postbank litigation and expects a €430mn boost to its pre-tax profit in the third quarter.
Germany’s largest lender announced late on Wednesday that it had reached a deal with more than 80 plaintiffs in one of its longest-running legal disputes, including the largest individual plaintiff representing “about a third of all claims”.
The settlements were made at €31 per Postbank share, representing roughly 45 per cent of the provisions that Deutsche had booked.
Deutsche surprised markets in April when it set aside a €1.3bn provision for the proceedings after the court in Cologne indicated it was poised to decide in favour of the plaintiffs. Its shares rose 3 per cent to €14.40 in morning trade in Frankfurt on Thursday.
“Should Deutsche Bank enter into settlement agreements with additional plaintiffs, this could result in further positive implications on the total provisions taken for the litigation,” the bank said.
Former Postbank shareholders have spent 14 years claiming that Deutsche Bank paid too low a price for their holdings.
They argue that the bank had gained de facto control years before while it was in the process of buying out the remaining minority investors. It first took a stake in 2008 with an option to increase this later, which it did in three stages up to 2010.
The claimants maintain that Deutsche ignored an obligation under German law to make a mandatory takeover offer to the remaining shareholders at a time when Postbank’s shares were trading at €57.25 against the €25 Deutsche eventually paid.
The claims were originally struck down by courts in Cologne in 2011 and 2012, but these rulings were later nullified by Germany’s Federal Court of Justice.
Deutsche Bank lost a subsequent trial in 2017 but lodged an appeal, resulting in an another series of lawsuits.
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