FRANKFURT – On Wednesday, Deutsche Bank (NYSE: DB) said it had reached settlements with several plaintiffs who sued the lender for underpaying them for the Postbank acquisition years ago.
The development goes some way in helping Germany’s largest lender move beyond the years-long litigation that has cast a shadow over the bank.
Deutsche Bank said the agreements cover 60% of the claims, including the largest individual plaintiff.
The bank said that the agreement will use about 45% of provisions the bank has made for possible payouts.
The bank is now reducing by 430 million euros ($479.49 million) the money it set aside for possible payouts in the case, which will have a positive impact on earnings in the third quarter.
Deutsche Bank (NYSE: DB) said it was pleased by the settlements, which “substantially reduce the cost and risk” of the Postbank litigation.
“Against the backdrop of this improvement to our capital plan, we will review our distribution plans and discuss these with our regulators as part of our ongoing dialogue,” Deutsche Bank said.
The suits claiming Deutsche Bank underpaid former shareholders for Postbank in 2010 have bounced around in the courts for years.
The matter took a dramatic turn in April, when a court in Cologne sounded sympathetic to the former shareholders’ case, prompting Deutsche to make an unexpected 1.3 billion euro provision to offset any possible payout to plaintiffs.
The provision resulted in the bank reporting a quarterly loss, breaking a profit streak of 15 consecutive quarters.
Last week, Deutsche Bank proposed a settlement to shareholders but a lawyer for the plaintiffs rejected the offer as too low.
Earlier on Wednesday, the Cologne court was set to hold a hearing on the matter but it postponed the date, saying more time was needed to deliberate.
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(Source: ReutersReuters)
Deutsche Bank NYSE: DB Postbank
