(Bloomberg) -- Deutsche Bank AG has been carrying out a review of its legal risks after it failed to anticipate the likely outcome of a big case earlier this year, resulting in a surprise hit to its profits and a delay in promised investor payouts.
The German lender announced in April it would set aside as much as €1.3 billion ($1.4 billion) in provisions after a German court indicated it would hand down an unfavorable ruling in a case linked to the takeover of domestic rival Postbank more than a decade ago. The financial hit prompted Deutsche Bank to postpone a buyback it had reaffirmed on an investor call just a day earlier.
The Postbank hit caused “us to look hard at the rest of our legal profile, and work hard this year to put anything more that we can behind us,” Chief Financial Officer James von Moltke said at a conference on Wednesday. “We don’t want to be in the position of throwing surprises at investors anymore.”
Von Moltke mentioned lawsuits Deutsche Bank is facing in Poland over mortgages denominated largely in Swiss francs as one area of legal risk that has been reviewed. The lender had set aside total provisions worth €534 million at the end of last year for the cases.
--With assistance from Konrad Krasuski.
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