Deutsche Bank’s day-to-day business has recently been running smoothly again, but now the winning streak could be broken. The reason is a billion-dollar provision in a legal dispute that has lasted for years.
The long-term effects of the Postbank takeover many years ago could push Deutsche Bank into the red in the second quarter. From April to the end of June, a loss of 281 million euros is likely to have been incurred, according to a survey of 14 analysts by the bank before the publication of the quarterly figures this Wednesday (7 a.m.). In the second quarter of 2023, the shareholders of the DAX group still had a net profit of 763 million euros.
A loss in the spring quarter would be the first deficit since the beginning of 2020 for Germany’s largest bank, which has managed to turn things around in recent years and has once again posted billions in profits. Before taxes, profits are likely to have fallen by more than 70 percent to just under 400 million euros, analysts estimate.
In April, Deutsche Bank announced that it expected to have to pay billions in additional payments in the lengthy legal dispute with former shareholders of the acquired Postbank. The bank is expected to set aside 1.3 billion euros for this in the second quarter – a burden on the way to achieving its annual targets.
In any case, there has been a lot of unrest at Postbank recently: chaos during the transfer of customer business to Deutsche Bank’s computer systems annoyed many clients. At times they were unable to access accounts and mortgage loans were delayed.
On an annual basis, Deutsche Bank is likely to see a decline in profits in 2024. The analysts surveyed expect a net profit attributable to shareholders of 3.4 billion euros – after 4.2 billion in 2023. Deutsche Bank is struggling, among other things, with the diminishing effect of the increased interest rates, which initially had a positive impact on the banking industry.
Source: Stern
