Deutsche Bank AG announced that a recent court ruling regarding its acquisition of Postbank will necessitate a legal provision, impacting its financial performance for the second quarter and the entire year.
The Higher Regional Court of Cologne evaluated claims from former Postbank shareholders asserting that the offer price for the 2010 takeover should have been higher.
“During the hearing, the Court indicated that it may find elements of these claims valid in a later ruling,” the bank stated, emphasizing its strong disagreement with the assessment.
Nonetheless, the court’s statements will influence Deutsche Bank’s assessment of potential future financial obligations, resulting in a legal provision in the second quarter of 2024.
This provision is expected to affect both the bank’s second-quarter results and its full-year profitability and capital ratios.
While the total amount of claims from Postbank shareholders, including accumulated interest, is approximately 1.3 billion euros ($1.39 billion), a spokesperson clarified that this figure serves as the upper limit for the provision, which has yet to be finalized.
“Generally, management does not expect a significant impact on the bank’s strategic plans or financial targets,” Deutsche Bank remarked, seeking to reassure stakeholders amidst the legal developments.
In 2008, Deutsche Bank initially acquired a stake in Postbank amounting to just under 30 percent, at a price of 57.25 euros per share.
As it gradually increased its ownership over subsequent years, the global financial crisis unfolded, leading to a reduction in Deutsche Bank’s offer for the remaining shares, much to the dissatisfaction of smaller Postbank shareholders.
The legal dispute surrounding the acquisition has been ongoing in German courts since 2011.