FRANKFURT (Reuters) -Deutsche Bank shares fell 5.5% in early trading on Monday on news that a long-running lawsuit could cost Germany's biggest lender up to 1.3 billion euros ($1.39 billion).
The issue is a blow to Deutsche, which posted better-than-expected profits last week, boosting its shares. It is the latest in a series of problems that have arisen from the purchase of the no-nonsense Postbank.
Analysts at RBC lowered the price target for Deutsche Bank, despite the 'outperform' rating.
“It is disappointing that improved performance and a constructive work environment are being overshadowed by legacy lawsuits from long ago,” RBC said.
Deutsche Bank unexpectedly announced last Friday that it would make a provision to compensate for possible claims in the lawsuit.
It said it “continues to strongly disagree” with the view that it has underpaid. The bank did not specify the amount it had set aside, but noted that the claims totaled about 1.3 billion euros.
The news followed better-than-expected earnings figures and a sharp rise in the share price.
Deutsche said the provision would impact second-quarter and full-year profitability.
($1 = 0.9325 euros)
(Reporting by Tom Sims; Editing by Friederike Heine and Jason Neely)
