It is an L lower case and it is part of the serial number. Your barrel is also unique. Barrel was not Walther made but was supplied by fnh which will add to the value of the pistol if all other parts have matching serial numbers.
Walther only used the fnh barrel in the 1944 l block pistols. fnh was another of the nazi secret codes for CZ. So your Walther has the somewhat rare CZ contract barrel that was supplied to some pistols in the 1944 L block pistols. Does the locking block on the bottom of the barrel have the last three digits of the serial number? Is the locking block in the white meaning that it is not blued? locking block looks to be in the white but not sure from photo.

Looks like you have a keeper collectible. I would not shoot it. Cracking a slide or breaking a locking block will kill the value. After all these years the springs get a little weak and a good battering can crack something that can not be replaced due to it being serialed numbered. Sure a cracked part can be replaced but it will not be serialed numbered to the pistol. If you want to research your pistol further a web forum at p38forum.com will be the place. http://www.p38forum.com/