Deutsche Bank AG DB shares are trading higher today. The company stated that it has made substantial progress in its discussions with plaintiffs regarding the litigation over the Postbank takeover and the offer price paid to former Postbank shareholders.
On Thursday, the company reached agreements with over 80 plaintiffs, covering nearly 60% of the total claims.
The settlements are based on an offer of €31 per share, as proposed by the bank, and include a settlement with the largest individual plaintiff, who represents around one-third of all claims.
Elliott Investment Management is receiving nearly €200 million ($222 million) from Deutsche Bank to resolve the long-running legal dispute, Bloomberg reported, citing people with knowledge of the matter. The report mentioned that the activist hedge fund was the largest plaintiff in the litigation over the Postbank takeover.
Deutsche Bank expects the settlement agreements reached so far to utilize around 45% of the total provisions set aside for the claims covered by these agreements.
The remaining provisions related to these plaintiffs will be released, which will have a positive impact of about €430 million on the bank’s pre-tax profit in the third quarter.
If Deutsche Bank reaches settlement agreements with additional plaintiffs, it could lead to further positive impacts on the total provisions set aside for the litigation.
In July, the bank reported first-half 2024 net revenue growth of 2% to €15.4 billion, with profit before tax at €2.4 billion-€3.8 billion excluding the Postbank litigation provision compared to €3.3 billion in the first half of 2023.
Price Action: DB shares are up 0.96% at $16.36 at the last check Friday.
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