Deutsche Bank shares slip after lender sets aside $1.4 billion to settle Postbank lawsuit

By Louis Goss

Shares in the bank closed last week near a seven-year high, having rallied some 60% over the past 12 months

Deutsche Bank shares fell Monday after the German lender warned it could be forced to pay out up to EUR1.3 billion ($1.4 billion) to settle a lawsuit over claims it underpaid Postbank's shareholders during its EUR6 billion takeover of the lender in 2012.

In a statement late Friday, Deutsche Bank said the Higher Regional Court of Cologne had assessed claims made by "certain former Postbank shareholders" and that the court "indicated that it may find elements of these claims valid in a later ruling."

Deutsche Bank (XE:DBK) shares fell 8% on Monday. Shares in the bank closed last week near a seven-year high, having rallied some 60% over the past 12 months as investors warmed to signs of improving economic conditions in Europe and amid hopes the European Central Bank would start cutting interest rates in June.

The lawsuit relates to claims that Deutsche Bank used its position in Postbank to underpay for the Bonn-based financier by pushing it into selling at a price of EUR25 per share after Postbank's stock crashed in the wake of the 2008 financial crisis.

In 2008, Deutsche Bank acquired a 30% stake in Postbank for EUR57.25 per share before slowly increasing its position in the formerly state-owned lender and later launching a full-scale takeover in 2012 at EUR25 per share.

Deutsche Bank said that while it "continues to disagree strongly with this assessment," it now expects to pay out up to EUR1.3 billion to settle the claims following the Cologne court's assessment.

Deutsche Bank more broadly reported a solid first quarter, with its profit rising 10% to EUR1.45 billion after revenue rose 1% to EUR7.78 billion, with both figures narrowly beating analyst estimates. The revenue growth came from its investment-banking and asset-management arms.

-Louis Goss

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

04-29-24 1021ET

Copyright (c) 2024 Dow Jones & Company, Inc.