Deutsche Bank ordered to pay out over Postbank takeover

Deutsche Bank has reported record profits in its third quarter for 2024 with pre-tax profits for the quarter coming in at €2.3bn, a jump of 31% compared with the same period last year. 

The bank revealed it was able to release a portion of the litigation provisions previously set aside for the Postbank takeover case’s settlements. The value of the release is around €440m. 

Without the litigation provision release, the bank’s pre-tax profit was €1.8bn, still a record figure for the third quarter, and an increase of 6% on the same period last year. 

Profit after tax for the third quarter of the year, not taking the Postbank litigation release into account, was €1.7bn, which was a jump of 39% from Q3 2023. 

Pre-tax profit for the first nine months of the year was €4.7bn, a decrease of 5% from the same period in 2023. This figure included the Postbank litigation impact, which came up to around €900m. 

Excluding the effect of the litigation, pre-tax profit was €5.6bn for the first nine months of the year. This was a rise of 13% compared to the same period last year. 

Christian Sewing, the chief executive officer (CEO) of Deutsche Bank, said in a press release: “In these three months, we made important progress in putting legacy litigation matters behind us, while also producing a record third-quarter profit in our operating business. This reflects our strong franchise, positive momentum across our businesses, and sustained cost discipline. 

“Our Global Hausbank is ideally positioned to help clients navigate the uncertainties in today’s environment, and this reinforces our confidence that we will continue on our path of profitable growth and exceed our original goals for capital distributions to shareholders. We have now sought authorisation for further share repurchases.”

Deutsche Bank loses Postbank case

In a separate development, the Higher Regional Court of Cologne has ordered Deutsche Bank to pay further compensation to Postbank investors who claimed that the bank underpaid them when it took over Postbank in 2010. This upholds a previous judgment.

The investors claimed that, instead of the €25 per Postbank share they were paid back in 2010, they should have been paid €57.25, the Postbank stock price back in 2008, when Deutsche Bank first acquired a stake in it. The claimants are pushing for a settlement of  €100m in total. 

Deutsche Bank said in a statement: “We will now analyse the judgment. Deutsche Bank has booked provisions covering all outstanding claims by the plaintiffs including interest claims accrued to date. Therefore, the bank considers itself essentially fully protected; any additional financial impact would be limited to further interest accruing currently approximately €2m per month. 

“Today’s ruling does not have an impact on any of the previously agreed settlements. Deutsche Bank has settled with a total of 70% plaintiffs in the Postbank takeover litigation matter, representing 62% of the total claims by value. 

“As announced in August, Deutsche Bank expected a positive impact on its pre-tax earnings from the settlements already reached. The corresponding release of provisions of approximately €440m is reflected in the results published today for the third quarter.”