Deutsche Bank's Postbank Troubles: A Long Road to Resolution
Deutsche Bank's promise to sort out Postbank's problems by year-end appears to be a tall order. A bank spokesperson acknowledged progress in handling the backlog of customer inquiries since the summer, thanks to a surge of over 800 additional workers, but the complex nature of the remaining cases means some will drag on until early 2024.
Complaints from customers have increased, particularly following an IT shift in which twelve million Postbank users in Germany were merged with seven million Deutsche Bank customers on a common platform, resulting in various issues like account access problems or unpaid bills. Customers often encountered difficulties reaching customer service or resolving their concerns.
There were also troubles with seizure protection accounts, designed to safeguard a certain balance from seizure for individuals in debt. Postbank has faced criticism for delays in processing these accounts, impacting people's ability to pay for basic necessities like rent, electricity, food, and medication.
In response to long-term complications in customer service, Germany's financial supervisory authority, Bafin, admonished Postbank and urged a swift resolution. Shortly after, Deutsche Bank CEO Christian Sewing publicly apologized and vowed to resolve the issues by the end of the year, acknowledging their failures and customers' disappointment.
Now, affected Postbank customers can apply for compensation online. The bank was criticized for delaying garnishment requests, insolvencies, and garnishment protection accounts' setup or termination. By submitting evidence such as reminder costs and interest on arrears, eligible customers can claim up to €1000 in compensation, with justified compensation claims reimbursed by the following month.
Despite Deutsche Bank's ongoing problems, the bank has announced a €106 million profit for shareholders and plans to increase dividends and a stock buyback program. Additionally, they aim to become more technology-driven while cutting costs, targeting a €32 billion revenue in 2025.
Additional Insights:
- Legal Complexity: Deutsche Bank's post-acquisition legal costs reach approximately €1.7 billion, as former Postbank shareholders argue for compensation following the 2010 majority acquisition.
- Hefty Compensations: Deutsche Bank has doled out a combined €1.2 billion in compensation for the Postbank legal matter and foreign currency loans in Poland.
- Regulatory Scrutiny: Bafin will conclude its investigation into Deutsche Bank's activities, including the Postbank acquisition and foreign currency loans concerns in Poland.
- Financial Impact: Legal expenses have significantly impacted Deutsche Bank's earnings, causing a 92% drop in Q4 2024 profit attributable to shareholders.
- Future Focus: Deutsche Bank aims to increase revenue and become more technology-driven, reducing costs through workforce reductions and closures of certain business units.
