Deutsche Bank wants to renegotiate terms of the deal following a sharp drop in Postbank's share price between the day the transaction was agreed and its expected finalisation in a few weeks, the business daily Handelsblatt said, citing unnamed financial sources.

Germany's biggest bank is set to take a stake of 29.75 per cent in Postbank, which has the biggest retail network in the country, for 57.25 euros per share, or a total price of 2.79 billion euros (S$5.54 billion).

Postbank shares closed on September 12, the day the deal was announced, at 42.90 euros, but on Monday they ended the day at 13 euros on the Frankfurt stock exchange.

'We reached an agreement on a contract with Deutsche Bank, and we are sticking to it,' the newspaper quoted a Postbank spokesman as saying.

Deutsche Bank declined to comment, saying only that it was sticking to the transaction's timetable.

Last week, the second biggest German bank, Commerzbank, said it had renegotiated the price it would pay for Dresdner Bank, which is being sold by the insurance group Allianz.

Purchases of banks in the midst of the international financial crisis is a risky manoeuvre that can disrupt the purchaser's financial balance, especially if the target holds assets with values that must be reevaluated lower.

On Friday, Postbank, which is owned by the logistics group Deutsche Post, said it expected a significant loss for 2008, in part owing to a fall in value of its portfolio of investments. -- AFP