Deutsche Bank says it will take a €1.5bn hit from Trump's tax reforms

Deutsche Bank - Foyer Undersphere

Deutsche Bank's fourth quarter results will take a €1.5bn (£1.3bn) hit as it attempts to wrangle with Donald Trump's corporate tax reforms, it said today, as it warned on revenues.

The lender said the change, which cuts corporation tax from 35 per cent to 21 per cent, will lead it to record a "small full-year loss", reducing its common equity tier one ratio by 10 basis points.

However, it added it does not expect a significant long-term impact.

Revenue hit

Deutsche also said combined fourth quarter revenues in its fixed income, equity and financing businesses were likely to fall 22 per cent below last year, pushing pre-tax income into the red.

However, despite €500m of restructuring and litigation charges, it said full-year income will be in positive territory.

"This reflects the weak revenue environment, elevated adjusted costs currently anticipated to be broadly in line with the prior year period, and a loss on sale from the recently announced disposal of the Polish private and commercial bank business," it said.

Shares in the struggling lender fell more than 4.6 per cent on the news, which came a day after the European Central Bank (ECB) raised its minimum capital requirements by more than a percentage point to 10.65 per cent, although it said its current common equity tier one ratio is 14.58 per cent.

Deutsche is not the only one to admit to extra costs as it seeks to comply with Trump's reforms. Earlier this week BP said it will take a one-off hit of $1.5bn (£1.1bn) from the changes.

Full story: Deutsche Bank says it will take a €1.5bn hit from Trump's tax reforms: City A.M.

JefferiesAnd the Best Place to Work in the global financial markets 2017 is...

Register for Financial Markets News Alerts