Deutsche bank shares drop 5.5% following Postbank news

Deutsche Bank‘s shares fell by 5.5 per cent in early trading on Monday following news of a longstanding lawsuit that could cost the bank up to €1.3 billion ($1.39 billion) according to Reuters.

This comes as a setback for Deutsche, which recently reported better-than-expected earnings, boosting its shares.

The issue is the latest in a series of problems stemming from its acquisition of Postbank. Despite an “outperform” rating, RBC analysts have reduced Deutsche Bank’s target price.

Deutsche Bank announced last Friday that it would set aside provisions to cover potential claims in the lawsuit, although it did not specify the amount. However, it was noted that the total claims amounted to about €1.3 billion.

This announcement followed a period of better-than-expected earnings and a significant increase in its share price. Deutsche Bank stated that this provision would affect its profitability for the second quarter and the full year.