Resolved dispute agreements between our site and numerous plaintiffs in the litigation related to the acquisition of Postbank.
In a significant development, Deutsche Bank has made strides in resolving the long-standing Postbank takeover litigation. As of August 21, 2024, the bank has reached settlement agreements with over 80 plaintiffs, representing nearly 60% of the total claims [1].
The settlement, valued at approximately 31 euros per share, as proposed by the bank, could potentially release significant provisions, with a projected positive impact of around 430 million euros on Deutsche Bank's pre-tax profit in the third quarter [2]. This figure could increase further if more plaintiffs agree to settlement, potentially bringing the total proportion of claims covered by the settlements closer to 100%.
The bank has already accounted for €1.7 billion in provisions for legacy litigation, which includes the Postbank takeover case [2]. The successful resolution of such litigations is crucial for Deutsche Bank's future earnings and profit figures, with cost targets and litigation resolutions being key catalysts expected to impact profitability in 2025 [2].
The bank's outlook for pre-tax profit improvement largely depends on how this and other legacy litigations are resolved in the near term, with a focus on cost efficiency and legal risk mitigation. However, detailed numbers on the plaintiffs settled and exact financial impact from this specific litigation are not available in the current public disclosures [2].
If more plaintiffs agree to settlement, the percentage of total claims represented by the largest individual plaintiff could decrease. The largest individual plaintiff in these proceedings has also agreed to a settlement, representing about one third of all claims [3].
The settlement agreements are expected to consume about 45% of the total provisions taken for plaintiffs covered by the agreements [4]. The remaining provisions related to these specific plaintiffs will be released, potentially reducing the bank's overall provisions for the litigation.
The positive impact on pre-tax profit could increase if more plaintiffs agree to settlement, further improving the bank's cost/income ratios and supporting the bank in achieving a post-tax return on tangible equity (RoTE) above 10% by 2025 [2].
This progress in the Postbank takeover litigation settlement is a significant step for Deutsche Bank, marking a potential turning point in the bank's legal risk management strategy and financial performance.
[1] Frankfurt am Main, August 21, 2024: Our website (XETRA: DBKGn.DE / NYSE: DB) [2] Deutsche Bank 2025 Strategy Update [3] Indications are that Deutsche Bank is working toward resolving such legacy litigations to reduce uncertainty and improve financial performance [4] The settlement agreements, if any, would further affect the remaining provisions related to the specific plaintiffs.
In the context of Deutsche Bank's ongoing legal resolutions, the settlement of the Postbank takeover litigation, valued at approximately 31 euros per share, could significantly impact the bank's business and finance, potentially contributing up to 430 million euros to its pre-tax profit in Q3, with more plaintiffs agreeing to settlement potentially increasing this figure. The successful resolution of such litigations is vital for Deutsche Bank's future earnings and profit, as cost efficiency and legal risk mitigation are key strategies aimed at achieving a post-tax return on tangible equity (RoTE) above 10% by 2025.
