FRANKFURT - A months-long wage dispute at Deutsche Bank's Postbank arm is escalating with additional strikes ahead of a fourth round of talks next week as employees demand a 15.5% pay raise.

The pressure comes as Germany's largest lender tries to keep a lid on costs and as it manages customer service glitches at Postbank that were severe enough to get the bank's regulator overseeing the cleanup.

The labour union Verdi, which represents thousands of bankers in the wage negotiations, has extended a strike this week to also include Thursday in what officials said would make for a 20th day of walkouts.

The action will affect Postbank's hundreds of branches across Germany and is the last strike planned before negotiations resume on April 16.

"The strikes are having a massive impact in all areas," including the processing of customer requests, Kevin Voss, a Verdi official, told Reuters.

Deutsche Bank declined to comment.

The union made its initial demand for a 15.5% pay increase in December, a level it says is justified due to the rapid pace of inflation after a previous wage agreement was concluded in 2022.

Deutsche Bank rebuffed the demand in February, prompting union negotiators to write in a flyer to bank staff that "our first date was a flop".

Strikes followed, and Deutsche Bank management came back in March with an offer for a 6.4% raise from June followed by another 2% in July 2025.

"We are still a long way from reaching a deal," Jan Duscheck, Verdi's chief negotiator and member of Deutsche's supervisory board, said at the time in reaction to the offer.

The dispute comes at a sensitive time for Deutsche.

Last year, Deutsche botched its integration of Postbank, which left customers complaining that they were locked out of their accounts and unable to reach call centres.

The bank's regulator, BaFin, publicly criticised Deutsche Bank and installed a special monitor to oversee how Deutsche addressed the customer service issues. BaFin is currently assessing Deutsche's progress in the matter.

Deutsche Bank is also trying to reduce costs. The bank aims for a cost-to-income ratio of 62.5% next year. It was 82.2% in the fourth quarter of 2023.

(Reporting by Tom Sims Editing by Miranda Murray and Sharon Singleton)