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German bank suffers due to Trump policy

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The shares of Germany’s flagship Deutsche Bank have plunged more than five percent due to President Donald Trump's tax reforms in the US. reports citing Press TV.

Germany's biggest lender announced on Friday that Trump's tax reforms pushed Deutsche Bank into the red in 2017.

Deutsche Bank was hit by a €1.4-billion charge tied to the US tax overhaul, according to media reports.

The giant banking firm reported a €2.2 billion ($2.7 billion) net loss for the fourth quarter and its third consecutive full-year loss, sending its shares in the stock markets into a nosedive.

“US tax reform at the end of the year meant that we had to post a full-year after-tax loss," chief executive John Cryan said in a statement.

The bank said it would have reported profits of around one billion euros for the year had the tax changes not landed in November. Back then, President Trump's tax reform bill, aimed to revamp the US tax code, including a massive cut to the corporate tax rate, was passed by the US House of Representatives.

The cut to the corporate taxes caused Deutsche Bank to suffer a short-term loss as the tax breaks it received for its financial difficulties shrank along with the cut in the tax rate.

Earlier this month, Deutsche Bank forecast that it would eventually benefit in the longer term from Trump's tax cut.

Cryan told analysts in a conference call that "the outlook for revenues in 2018 seems improved compared with 2017".

Analysts say Trump’s tax cuts were devised to benefit the wealthy.

Marco Vailati, head of research at Italy's Cassa Lombarda company specializing in stock market research, said the Trump tax cuts were benefiting US businesses particularly.

European shares were more vulnerable than their American peers to a possible pullback because earnings growth expectations were stable, whereas those for US companies were being revised upwards thanks to measures there to cut taxes, according to the researcher.

2018.02.02 / 21:44
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