THE chances of Deutsche Bank carrying out a second share buyback this year have become slimmer, the German lender told investors just before its annual general meeting.
Such a programme has become “less likely” given the new provisions of as much as 1.3 billion euros (S$1.9 billion) announced recently, Deutsche Bank said in a document on its website. The document answers written questions submitted by investors ahead of its AGM on Thursday (May 16).
The firm’s other capital distribution plans remain unchanged, the bank said.
The remarks are the starkest acknowledgement yet from Deutsche Bank that parts of its payout plans have been thrown into disarray. The lender had renewed a pledge to carry out a second buyback this year just a day before it made a surprise announcement on the fresh provisions.
Analysts had previously cast doubts over the bank’s ability to stick to the buyback pledge, but Deutsche Bank until now had declined to comment on the matter.
The decision to book the charges followed a hearing in which a German court indicated that it may partly side with claimants in a lawsuit against Deutsche Bank. The hearing changed the lender’s view on how likely it is that it will end up having to make a payment.
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The bank will book the provisions in the current quarter, it said on Apr 26, a day after reporting quarterly earnings without mentioning the court hearing and its potential impact. The charge will hit full-year profitability, it said. BLOOMBERG
