By Tom Sims

FRANKFURT Customers of two Deutsche Bank units have lodged a surge in complaints with Germany's consumer protection agency, the advocacy group said on Monday, as the banking giant scrambles to make good with aggravated clients.

The VZBZ consumer group said it had registered about 1,700 complaints by customers of Deutsche's Postbank arm and its mortgage division in the year through September. That is nearly a threefold increase of its overall complaints from all of 2022.

Germany's largest bank earlier this year botched the integration of its Postbank arm, leaving customers complaining that they were locked out of their accounts and unable to reach call centres.

The issue has drawn the scorn of the nation's top regulator and a mea culpa from Deutsche's chief executive. It is a setback for Deutsche's effort to restore credibility after fines over the last decade for lapses in money-laundering controls and other penalties.

A Deutsche Bank spokesperson said that the bank had put in place more than 500 additional staff to solve the problem and that there was "progress in all areas subsequently affected by the IT integration at Postbank".

"Two-thirds of the customer-relevant backlogs have already been dealt with," the spokesperson said.

The consumer group had already reported complaints of Postbank customers not having access to their funds for weeks and direct debits getting rejected, jeopardising their credit scores.

In its statement Monday with updated data, VZBZ said that nearly one in five complaints dealt with problems around customer service.

"Banks are cutting more and more jobs, which also affects customer service, so consumers are ultimately helpless when problems arise," said Ramona Pop, head of VZBZ.

Deutsche began acquiring Postbank, with its millions of clients and roots in the postal system, in 2008 during the global financial crisis, but for years struggled to complete its integration.

The bank said in July it had completed a final phase of integration, but in September the German financial regulator BaFin in an unusual rebuke said it had seen "considerable disturbances" at Postbank.

BaFin got nearly 10,000 complaints about Postbank by early September, a person with direct knowledge of the matter said.

BaFin's president later called the matter "unacceptable" and installed a special monitor at Deutsche.

Deutsche's CEO Christian Sewing said Deutsche had made mistakes.

"We have not lived up to our responsibility," he said.

(Reporting by Tom Sims; Editing by Rod Nickel)