Deutsche Bank AG (DB – Free Report) reported net loss of €2.2 billion ($2.6 billion) in fourth-quarter 2017, compared with net loss of €1.9 billion ($2.3 billion) in the year-ago quarter. The results were affected by non-cash charge of €1.4 billion resulting from a valuation adjustment on its deferred tax assets due to the tax reform.
Also, the bank reported loss before income taxes of €1.3 billion ($1.6 billion) compared with loss of €2.4 billion ($2.9 billion) in prior-year quarter.
Cost management and reduction in provisions were the positive factors. However, lower revenues due to trading slump remained an undermining factor. Notably, net new money inflows were recorded during the quarter.
For 2017, Deutsche Bank reported net loss of €0.5 billion ($0.6 billion). However, it reported income before income taxes of €1.3 billion ($1.6 billion) versus a pre-tax loss of €810 million ($968.8 million) in 2016.
Recently, the German bank agreed to a $70-million settlement with the U.S. regulator over manipulation of the benchmark interest rate derivatives and other financial instruments.
Weak Revenues & Low Provisions Recorded, Costs Down
For 2017, net revenues were €26.4 billion ($31.6 billion), down 12% year over year.
The bank reported net revenues of €5.7 billion ($6.8 billion) in the fourth quarter, down 19% year over year. Low client activity levels and interest rates, along with subdued volatility, during the quarter led to the downside. Also, the quarter was particularly impacted by strategic business disposals.
Fourth-quarter revenues at the Corporate & Investment Bank (“CIBâ€) division of €2.7 billion ($3.2 billion) declined 16% from the year-ago quarter on soft client activity and subdued volatility. Lower Equity Sales & Trading and Origination and Advisory revenues along with reduced revenues in Global Transaction Banking led to the fall. Moreover, reduction in Fixed Income & Currencies revenues was also recorded.
