Deutsche Bank may take further charges on Postbank

Deutsche Bank has revealed that it may take further charges on Deutsche Postbank, a consumer lender that it plans to sell to raise capital levels. The bank was seeking to restore investor confidence by selling Postbank and reducing its securities unit, however, since that announcement in April last year, shares have dropped. Macquarie and Citigroup analysts are predicting that Deutsche Bank will face further charges on the sale; the bank may write down the value of Postbank to €2.8bn from €4.5bn according to Reuters' reports.

Deutsche Bank plans to write down the value of Postbank by about a third, ahead of a planned sale of the retail unit as part of a strategic overhaul, two people familiar with the matter said.

Deutsche Bank will cut the book value of Postbank to 2.8 billion euros ($3.15 billion) because the current book value of 4.5 billion euros is seen as unachievable in either an initial public offering or a sale, the sources added.

"Most retail banks trade at 0.5-0.6 times book," an investment banker specialising in financial institutions said, adding the magnitude of the writedown made sense.

Deutsche Bank told Reuters it would make any writedowns on Postbank when it was close to selling, which would depend on the market at that time, meaning it is unclear when the writedown will show up in the bank's results.

"It is too early to speculate about potential outcomes," it said in e-mailed comments.

Shares in Germany's biggest lender are down around 35 percent since the start of the year, leading a slump across the European financial sector, as investors worry about how banks can make money in the face of a deteriorating global economic outlook and negative interest rates.