Deutsche Bank has estimated a $365m (€300m) hit after a court recently ruled in favour of consumers over banking fees.
At a conference, the German bank’s chief financial officer James von Moltke predicted a €100m provision in the current quarter.
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In addition, a temporary revenue decline of €100m is expected in the second as well as third quarters.
This warning comes after a German high court ruled against the bank on 27 April. The case was filed by a consumer rights group against Deutsche Bank’s Postbank retail business.
The judges said that the bank unilaterally changed its terms and conditions and treated customers’ lack of response as agreement.
The ruling could wipe out nearly 50% of the German banks’ annual profits, the country’s financial regulator BaFin warned last month.
The hit from the court decision will add to approximately €200m in unexpected costs related to the bank’s retail unit.
In April, the bank noted that it would miss its 2021 cost-cutting target by €400m owing to additional payments into the EU’s bank bailout funds, Financial Times reported.
It will also incur a €70m payout to Germany’s private banking deposit insurance scheme.
Furthermore, Deutsche Bank is forecasted to miss its 2022 cost-cutting target, which was raised by €300m in December. The raise was based on expectations that the banking levy will drop next year.
Last month, BaFin ordered the bank to deploy additional safeguards to prevent money laundering.
