(Bloomberg) -- Deutsche Bank AG may end up agreeing to settle its latest legal issue out of court in a bid to reduce the impact on profitability, according to Mediobanca. 

The lender’s “worst-case scenario” would be to pay out the entire €1.3 billion ($1.4 billion) it flagged last week as its maximum provision, analyst Matthew Clark said in an email to clients that was seen by Bloomberg. However, the actual payment could turn out to be lower “given scope for out-of-court settlements.” 

Deutsche Bank said late Friday it’s going to book legal provisions in the current quarter, after a German court said it was likely to partially side with claimants in a long-running lawsuit related to the takeover of rival Postbank in 2010. 

The German lender said in a subsequent release on Sunday its management will “carefully assess our options for a potential settlement.” It also noted that the court has “suggested that the parties enter into settlement negotiations.”

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Shares in Deutsche Bank dropped as much as 9.2% on Monday — the steepest fall in over a year — as investors fretted over the lender’s ability to carry out a second share buyback this year.

The court has scheduled the next hearing for June 12, at which the opposing sides will have an opportunity to “comment on the indications given” last week, according to Deutsche Bank’s release on Sunday. A ruling is slated for August 21 if there isn’t a settlement beforehand.

“We will pursue those options which we deem most reasonable for the bank under the given circumstances,” the lender said in the release.

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