Deutsche Bank (DBKGn.DE) is anticipated to report a loss for the second quarter, marking an end to its streak of 15 consecutive profitable quarters. The expected loss is primarily due to a long-standing lawsuit related to its acquisition of Postbank, for which the bank has set aside 1.3 billion euros ($1.42 billion).
This lawsuit claims that Deutsche Bank underpaid for Postbank, allegations that the bank disputes.
The bank’s forecasted post-tax loss for the quarter is approximately 280 million euros, significantly wider than the 170 million euro loss previously predicted in May and a sharp contrast to the 763 million euro profit reported in the same quarter last year.
Despite each of Deutsche Bank’s four key operating divisions expected to post pre-tax profits, the overall loss poses a setback to the bank’s turnaround efforts under CEO Christian Sewing. The bank’s earnings report is scheduled for July 24.
Deutsche Bank, which began an overhaul in 2019 to recover from years of heavy losses, has faced criticism for ongoing regulatory and reputational issues, despite improvements in earnings.
The recent settlement of a 500 million euro lawsuit with Spain’s Palladium Hotel Group over derivatives losses indicates some progress in resolving outstanding legal challenges.
As the bank navigates these issues, investor attention remains focused on its ability to maintain stability and address regulatory concerns while managing the financial impact of ongoing legal disputes.