Deutsche Bank has provided an update on the Postbank takeover litigation matter.
In a hearing on April 26, 2024, the Higher Regional Court of Cologne assessed the claims of certain former Postbank shareholders that a higher offer price in connection with Deutsche Bank’s voluntary takeover offer of October 7, 2010, should have been paid. During the hearing, the Court indicated that it may find elements of these claims valid in a later ruling.
While Deutsche Bank continues to disagree strongly with this assessment, the court’s statements will impact Deutsche Bank’s estimation of the probability of a future outflow, resulting in a legal provision in the second quarter of 2024.
This provision will impact Deutsche Bank’s second quarter and full-year profitability and capital ratios. The estimate of the full amount of all claims, including cumulative interest, is approximately 1.3 billion euros.
On a pro forma basis as of March 31, 2024, the impact of the full provision on the bank’s Common Equity Tier 1 (CET1) ratio is estimated to be approximately 20 basis points, with a resulting pro-forma CET1 ratio of 13.25%. On the same basis, the Leverage Ratio would be 4.42% as of March 31, 2024.
Given the complexity of the legal issues and recency of the court’s statements, Deutsche Bank’s management will continue its analysis of the legal arguments and the potential financial statement impact. Generally, management does not expect a significant impact on the bank’s strategic plans or financial targets.
