“Deutsche Bank shares rise after Postbank settlements…”

German lender expects €430mn boost to profits after deal in one of the its longest-running legal disputes.

Deutsche Bank said it had reached settlements with 60% of claimants in the more than decade-long Postbank litigation and expects a €430mn boost to its pre-tax profit in the third quarter.

Germany’s largest lender announced late on Wednesday that it had reached a deal with more than 80 plaintiffs in one of its longest-running legal disputes, including the largest individual plaintiff representing “about a third of all claims”.

The settlements were made at €31 per Postbank share, representing roughly 45% of the provisions that Deutsche had booked.

Deutsche surprised markets in April when it set aside a €1.3bn provision for the proceedings after the court in Cologne indicated it was poised to decide in favour of the plaintiffs. Its shares rose 3% to €14.40 in morning trade in Frankfurt on Thursday.

“Should Deutsche Bank enter into settlement agreements with additional plaintiffs, this could result in further positive implications on the total provisions taken for the litigation,” the bank said.

They argue that the bank had gained de facto control years before while it was in the process of buying out the remaining minority investors. It first took a stake in 2008 with an option to increase this later, which it did in three stages up to 2010.

The claimants maintain that Deutsche ignored an obligation under German law to make a mandatory takeover offer to the remaining shareholders at a time when Postbank’s shares were trading at €57.25, compared with the €25 Deutsche eventually paid.

The claims were originally struck down by courts in Cologne in 2011 and 2012 but these rulings were later nullified by Germany’s Federal Court of Justice.

 Deutsche lost a subsequent trial in 2017 but lodged an appeal, resulting in another series of lawsuits.

Malta:

MeDirect records €550,000 pre-tax loss in first six months of 2024 after unfavourable expected credit losses

Malta-based MeDirect Group (MDB Group) has announced a pre-tax loss of €550,000 for the first six months of 2024 (H1 2024), a significant drop in performance from the €10.6 million pre-tax profit recorded in the same period last year (H1 2023), driven by changes in expected credit losses.

These figures were published in the group’s interim report for the six months ended 30th June 2024.

MDB Group is the parent company of MeDirect Bank (Malta) plc, a pan-European digital bank that is headquartered in Sliema. In recent years, it also expanded operations to also have a subsidiary bank in Belgium, and also launched its web and mobile platform in the Netherlands.

During the reporting period, MDB Group recorded a slight improvement in net interest income, going up from €39.1 million in H1 2023 to €40.5 million in H1 2024. This was primarily driven by greater income from mortgages and Maltese corporate portfolios.

Net fee and commission income was also on the rise, going up at a more rapid rate of 76.6 per cent to €3.4 million (H1 2023: €1.9 million).

Personnel expenses increased to €13.4 million (H1 2023: €11.6 million), while other administrative expenses rose to €23 million (H1 2023: €21.6 million).

The group registered a net operating profit of €5.4 million, representing an increase of seven per cent from the figure in H1 2023.

During H1 2024, MDB Group strived to de-risk its balance sheet by continuing to reduce the size of its international corporate lending (ICL) portfolio, which now stands at €300 million, net of provisions. This is a drop of nine per cent since the end of 2023. It managed its portfolio size through repayments, selected loan sales and limited reinvestments in higher rated loans to large-cap European and US companies.

Net expected credit losses (ECLs) for H1 2024 amounted to a €6 million net charge (H1 2023: €5.5 million net release), primarily driven by adverse changes within MDB Group’s ICL portfolio.

MDB Group stated that the net ECL charge was a result of a deterioration in two specific exposures and losses realised due to the divestment of one additional exposure. These impacts reflected the group’s reduced risk appetite for ICL lending.

It added that during the comparable period in 2023, MDB Group had recorded a substantial recovery of stage three exposures and benefitted from releases of provisions based on ECL model calculations.

The group’s total assets as at the end of the reporting period amounted to €5.1 billion, a slight increase from the €5 million recorded at the end of 2023.

During the past year, MDB Group stated that MeDirect has grown its customer base to 143,000, an increase of 25% over the past 12 months. These clients hold €5.4 billion in financial assets with the group as at the end of the reporting period, an increase of 18 per cent since the same period last year.

This growth in its customer base in Malta, Belgium and the Netherlands came as MeDirect continued to focus on building its digital platform, enabling clients to manage their wealth “with confidence and autonomy.”

Commenting on the performance, CEO Arnaud Denis noted that the first half of 2024 has seen MDB Group’s business in Malta, Belgium and the Netherlands “continue to grow.”

“The fact that an ever-increasing number of customers are trusting us with more of their wealth is the best evidence possible that our determined hard work, coupled with an open, innovation-focused culture, is delivering high levels of customer satisfaction, as evidenced by our Net Promoter Score of close to 50,” he continued.

Looking ahead, the group stated that it has a number of developments in the technology and product pipeline, including new developments to MeDirect’s card services, which were launched in Belgium this year.

Malta Company Announcements:

Trident Estates p.l.c

The Board of Directors of Trident Estates p.l.c is scheduled to meet on Wednesday, 11 September 2024 in order to consider and approve the Company’s Condensed Consolidated Interim Financial Statements for the six months ended 31 July 2024. 

APS Bank p.l.c

The Bank announced that it has received MFSA approval for the an interim dividend distribution, which will take place on 6 September 2024. 

Shareholders appearing on the register of members maintained by the Central Securities Depositary of the Malta Stock Exchange as at close of trading on 22 August 2024 (trading session of 20 August 2024) will be entitled to receive the dividend.

Premier Capital p.l.c

The Company announces that the Board of Directors is scheduled to meet on August 23, 2024, to consider and if deemed appropriate, approve the Company’s unaudited Interim financial statements for the period ending June 30, 2024.

Grand Harbour Marina p.l.c

The Company announces that the board of directors is scheduled to meet on the 29 August 2024 to consider, and if thought fit approve the half-yearly report of the Company for the six months ended 30 June 2024.          

Mainstreet Complex p.l.c

The Board of Directors of the Company also approved the payment of a net interim dividend of €104,676.94, or €0.0054 per share (each share having a nominal value of €0.10). The interim dividend will be paid by 12 September, 2024 to the shareholders of the Company appearing on the Company’s register of members maintained at the Central Securities Depository of the Malta Stock Exchange as at close of business on 30 August, 2024.

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