BERLIN, Jan. 30 (Xinhua) -- Deutsche Bank will post the third consecutive annual loss in 2017 since the start of an ambitious corporate restructuring plan initiated by Chief Executive Officer John Cryan, German media reported on Tuesday.
The firm had surprised investors negatively in January by revealing that it expected a "small loss after taxes" due to recent changes in U.S. corporate taxation signed into law by U.S. president Donald Trump. Deutsche Bank expects a one-off loss of 1.5 billion euros (1.86 billion U.S. dollars) as a consequence of the legislation.
Deutsche Bank already posted annual losses of 1.4 billion euros in 2016 and 6.8 billion euros in 2015. Nevertheless, Cryan has reiterated the need to continue with his restructuring plans.
"We always said that this restructuring would not be complete within one or two years," Cryan told the press, emphasizing that the crucial task of his firm was to "further lower our costs." Since assuming the leadership of
Furthermore, the banking executive announced the fusion of Deutsche Bank and Postbank within a single legal entity by the second quarter of 2018, as well as investments in outdated IT systems. However, media reports that the financial institution would pay out higher bonus payments to staff despite the renewed losses have sparked an angry public backlash. "Now is the time to invest in our people and remain internationally competitive, also with regards to salaries", Deutsche Bank's Co-Chief Executive Marcus Schenck subsequently defended the controversial step in the magazine "Focus". Schenck added that his staff "were not to blame" for Trump's tax reforms and their one-off effect on Deutsche Bank's financial performance. New U.S. fiscal legislation has been the source of some concern for several global financial institutions. Amongst others, the changes imply that U.S. losses can no longer be used as effectively to reduce tax liabilities in subsequent years and that profits which are held offshore by U.S.-registered firms will be subjective to a one-off special tax. Nevertheless, most banks believe that they will benefit from a corresponding lowering of taxes on corporate profits from 35 percent to 21 percent in the longer term. (1 euro=1.24 U.S. dollar)
