Deutsche Bank concurs with the majority of the complainants in the Postbank case.
Back in 2010, Deutsche Bank settled with Postbank shareholders by giving them €25 per share during its acquisition. However, many argue that this compulsory payment was not adequate. Just as a ruling was imminent, a settlement was agreed upon.
A significant number of shareholders and Deutsche Bank have now reached an accord. This settlement will significantly boost Deutsche Bank's pre-tax profit by €430 million in the third quarter. Out of over 80 claimants, making up almost 60% of all claims, approximately 60% have agreed to a settlement worth €31 per share, as suggested by Deutsche Bank.
One of the largest individual plaintiffs, accounting for around one-third of all claims, has also agreed to a settlement. Deutsche Bank anticipates that these settlements will consume around 45% of the average provisions. If more plaintiffs agree to settle, this could lead to a more substantial positive impact on the entire case's provisions.
Deutsche Bank had set aside billions in provisions
The reason behind this situation is Deutsche Bank's majority acquisition of Postbank in 2010. The main controversy is whether the mandatory payout to minority shareholders at that time was justified, and if Deutsche Bank had already substantially controlled the Bonn institution before it made a public takeover offer in 2010, implying that shareholders should have received more. Initially, shareholders were given €25 per share.
In an oral hearing at the end of April, the Cologne Higher Regional Court showed signs of leaning towards the plaintiffs' side. As a precaution, Deutsche Bank reserved €1.3 billion. This provision led to a loss of €143 million for the DAX company during the second quarter.
Other shareholders, who had initially opposed the settlement, have now reconsidered and chose to accept the offer. The remaining dispute between Deutsche Bank and the minority shareholders over the fairness of the €25 per share payment in 2010, known as the 'Other' issue, is yet to be fully resolved.
