Deutsche dragged into the red again by Trump tax reforms

DONALD TRUMP has pushed Germany’s biggest bank to a third annual loss in 2017, as the effects of his tax reform in the US continued to be felt by multinational companies.

Deutsche Bank slipped to a €500m (£434m) loss after tax, having booked a one-off charge of €1.4bn from reassessing its deferred tax assets in the US.

Without this cost it would have made net income of €900m, versus a net loss of €1.4bn in 2016. While Mr Trump’s tax measure should reduce company tax bills in the long term, a range of big firms, including Shell and Barclays in the UK, have declared one-off hits from the ensuing reduction in tax breaks.

On a pre-tax basis, the lender recorded a profit of €1.3bn.

The shares fell 6.2pc to €13.86 yesterday amid concerns that British-born chief executive John Cryan is failing to put the bank “back on the front foot”, as he promised last March, when the lender unveiled a restructuring plan and tapped shareholders for €800m. Mr Cryan insisted “we are firmly on the path to producing growth and higher returns with sustained discipline on costs and risks”, adding he was “not yet satisfied with our results”.

Revenue slipped 12pc to €26.4bn, and hit its lowest level in seven years in the fourth quarter, dropping 19pc year on year to €5.7bn. Deutsche blamed its poor fourth quarter on a series of disposals. But it said stripping out these effects, revenue would have fallen 10pc because of “low volatility and client activity” and “continuing low interest rates”. Investors were also disappointed to note costs in 2018 would tick up slightly to €23bn, a billion euros more than it had guided. Its Common Equity Tier 1 ratio, a measure of banks’ stability, edged up to 14pc, from 13.8pc in the third quarter, boosted by last year’s rights issue.

Separately, UK lender TSB warned its statutory profits before tax would be lower in 2018 because of a delay in rolling out a new IT system. The “challenger” bank, which was spun out of Lloyds Bank in 2013, said it would continue to pay outsourcing fees to its former parent until the platform is ready.

Those fees also contributed to a 14.5pc fall in 2017 pre-tax profit to £159.1m, as well as a strong comparison with the prior year, when TSB benefited from selling its stake in Visa Europe.

The bank also said Richard Meddings, a former Standard Chartered executive and current board member at Deutsche Bank, will become its chairman with immediate effect. He succeeds Will Samuel, who steps down after a four-year tenure.