Deutsche Bank AG disclosed that a recent court ruling regarding its acquisition of Postbank will necessitate a legal provision affecting its financial performance in the second quarter and for the entire year.
The Higher Regional Court of Cologne evaluated claims from former Postbank shareholders, asserting that a higher offer price should have been paid during the 2010 acquisition.
The bank stated, “During the hearing, the Court indicated that it may find elements of these claims valid in a later ruling.”
Despite Deutsche Bank’s strong disagreement with the assessment, the court’s statements will influence its estimation of potential future financial obligations, resulting in a legal provision in the second quarter of 2024.
This provision is anticipated to impact both the second quarter and full-year profitability, as well as capital ratios.
The estimated total amount of all claims by Postbank shareholders, inclusive of cumulative interest, stands at around 1.3 billion euros ($1.39 billion).
However, a spokesperson clarified that this figure serves as the ceiling for the provision, which is yet to be finalized.
The bank expressed that, “Generally, management does not expect a significant impact on the bank’s strategic plans or financial targets.”
In 2008, Deutsche Bank initiated its involvement with Postbank by purchasing a stake of nearly 30 percent for 57.25 euros per share.
Subsequently, as Deutsche Bank progressively increased its stake over subsequent years amidst the financial crisis, the offer for remaining shares halved, causing dissatisfaction among Postbank’s smaller shareholders.
The litigation surrounding this matter has been ongoing in German courts since 2011.