Bad news from DWP Bank is unusual.

The shareholders of the largest German securities custodian bank - the central institute of the Volks- und Raiffeisenbanken DZ Bank holds 50 percent, the other half is held by the savings banks - but now have to prepare for a loss of dividends for 2022.

According to preliminary information, a complex certificate business caused damage of 60 million euros at DWP Bank.

That's more than the pre-tax profit in 2021, when the securities processor made around 57 million euros.

A spokesman for DWP Bank said on Wednesday: "We can finance the business entirely from the 2022 annual result, but the result will remain positive." The incident has no negative impact on the bank's operational business or on its customers,

Markus Fruehauf

Editor in Business.

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The Internet portal “Finanz-szene” was the first to report on the erroneous stock exchange transaction that took place at the end of December.

This is a very complex transaction involving the splitting of a certificate on the price of gas.

The exchange ratio of 17,000 old titles for one new paper was unusual.

The exchange date was also postponed from a Friday to a Monday.

As a result, according to DWP Bank, "a block on certificates in the portfolio did not last long enough".

Private customer earns several millions

As a result, a private securities account customer was able to buy many certificates at the old price and sell most of them at the new, much higher price.

Given the exchange ratio of 17,000 to one, he should have earned several million euros with his original investment of a mid-four-digit amount.

It would be understandable if that customer wasn't interested in reversing the deal.

DWP Bank points out that it reacted quickly after the order was placed and was still able to prevent part of the execution.

However, not all orders could be stopped within the few minutes that would have been available.

The customer placed several orders on different exchanges in quick succession, most of which were rejected.

However, an exchange accepted an order.

In contact with the financial supervisory authority

DWP Bank attributes the damage to a chain of unfortunate circumstances, including the very unusual securities split, the postponement of the exchange date and thus also the very complex structures in securities processing.

The CEO of DWP Bank, Heiko Beck, still has to be prepared for unpleasant questions from the shareholders, because they are now threatened with a loss of dividends.

In the meantime, the institute has contacted the Federal Financial Supervisory Authority (BaFin) about the incident.

The spokesman reported constructive and trusting talks.

"But we can't, for example, say anything more specific about whether the custody account customer may have acted abusively or inadmissibly," he added.