Deutsche Bank edges toward resolution with settlements amid Postbank litigation saga

Deutsche Bank said it has reached agreements for settlements with more than half the plaintiffs who accused the lender of having underpaid them in the acquisition of Postbank years ago.

These agreements bring Germany's largest lender closer to moving beyond the years-long litigation that has cast a shadow over the bank.

It added that the reached agreements so far are covering 60 per cent of the claims, including the biggest individual plaintiff.

The bank said the agreements will use about 45 per cent of provisions the bank has made for possible payouts.

The bank will now slice 430 million euros ($479.49 million) from the money set aside for possible payouts in the case, which will benefit earnings in the third quarter.

Deutsche Bank said it was satisfied that the settlements "substantially reduce the cost and risk" of the Postbank litigation.

"Against the backdrop of this improvement to our capital plan, we will review our distribution plans and discuss these with our regulators as part of our ongoing dialogue," Deutsche Bank said.

The lawsuits claiming Deutsche Bank underpaid former shareholders for Postbank back in 2010 have been a fast-moving target in the courts for years.

Things came to a head last April when a court in Cologne sounded sympathetic to the former shareholders' case, and Deutsche was forced to make an unexpected €1.3 billion provision to offset any possible payout to plaintiffs.

That provision resulted in the bank reporting a quarterly loss, breaking a profit streak of 15 consecutive quarters.

A week ago, Deutsche Bank offered a settlement to shareholders but a lawyer for the plaintiffs said the offer was paltry.

The Cologne court had set a hearing on the matter earlier in the Wednesday session but delayed its proceedings, saying that more time was needed to deliberate.