Deutsche Bank expects to see a €430 million boost in its third-quarter results after making significant progress in resolving legal claims related to its 2010 takeover of Postbank AG.
The bank has reached agreements with more than 80 plaintiffs, covering almost 60% of the total claims. These settlements, made at €31 per Postbank share, account for about 45% of the money Deutsche Bank had set aside for these claims. The largest individual claimant, representing about a third of all the claims, was also included in the settlement.
In April, Deutsche Bank set aside €1.3 billion after a court warned that it might rule against the bank in this long-running dispute, which had led to the bank’s first quarterly loss in four years and halted its share buybacks.
Deutsche Bank’s settlement progress could mean more capital returning to shareholders in the future, though the bank is expected to remain cautious with buybacks for now.
The remaining provisions from these settled claims will be released, adding €430 million to the bank’s pretax profit in the third quarter. Analysts had previously predicted a pretax income of around €1.8 billion for this period.
The dispute goes back to Deutsche Bank’s 2010 takeover of Postbank, where some shareholders argued that the bank should have offered a higher price for the shares. Initially, Deutsche Bank offered €25 per share, but claimants believe it should have been €57.25, the price when Deutsche Bank first invested in Postbank in 2008. Some investors have even sought compensation of up to €64.25 per share.
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