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Deutsche Bank in the red again following Trump tax reform

By newadmin / Published on Friday, 02 Feb 2018 11:47 AM / No Comments / 11 views


 

Germany’s largest lender has said President Trump’s recent tax reform has pushed Deutsche Bank into the red again after two previous disastrous years. But that’s not the only trouble it has to deal with.

Presenting its 2017 earnings report in Frankfurt on Friday, Deutsche Bank said it logged a net loss of $639.7 million for the full year.

The figure marked the third consecutive year in negative territory, after losses of $8.5 billion in 2015 and $1.8 billion in 2016.

Deutsche said the 2017 loss was a result of the new US tax code, with the lender losing $1.8 billion in the final quarter. Without this one-off effect, Deutsche Bank would have logged a $1.1 billion bottom-line profit, it said in a statement.

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Chief Executive Officer John Cryan gave the 2017 figures a positive spin, saying the restructured bank had booked its first pre-tax profit in three years “despite a difficult market environment, low interest rates and continuously high investment in technology.”

Yet another fine for misdemeanor

Only hours earlier, Germany’s largest lender agreed to pay $70 million to settle a claim by U.S. regulators who had accused the bank of manipulating a benchmark for interest-rate derivatives.

A statement by the U.S. Commodity Futures Trading Commission (CFTC) said traders at Deutsche Bank Securities had sought to rig the ISDAfix benchmark and tried to steer the rate.

It’s a crucial benchmark in global financial markets that plays no small role in determining the values of trillions of dollars in interest-rate swaps and other financial instruments.

CFTC officials said abuses occurred between 2007 and 2012. “There is no room in our markets for manipulation,” CFTC Director of Enforcement James McDonald said in a statement. “We will continue to work hard to stamp it out wherever we find it.”

Deutsche Bank is not the only lender that’s been criticized for trying to rig the ISDAfix. The Royal Bank of Scotland, Citigroup, Barclays and Goldman Sachs have also had to settle CFTC probes, paying hundreds of millions of dollars in fines to the regulators.

This article originally appeared on DW.com. Its content was created separately to USA TODAY.

 

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