Deutsche Bank to take €1.5bn US tax hit

Deutsche Bank will take a €1.5bn (£1.3bn) charge following changes to the US tax code, meaning it will not make a profit for 2017.

The bank said its trading revenue in the fourth quarter also declined about 22% year-on-year, amid lower market volatility and less client activity.

Shares in Deutsche fell nearly 6% after the announcement.

The German lender also posted annual losses in 2016 and 2015.

Deutsche has grappled in previous years with hefty legal costs connected to money laundering charges, among other violations, but had hoped to turn a profit in 2017.

On Friday it said the tax changes would lead to a "small full-year after-tax loss".

Several large companies have announced one-time hits due to the changes to the US tax code that cut the corporate tax rate from 35% to 21%.

In the long run, corporations expect to benefit from lower rates.

But the switch has led many companies to revalue deferred tax assets, which are tied to deductions for past losses and can be used to reduce future tax payments.

As well as Deutsche, Morgan Stanley said it expected the changes in its deferred tax assets to lead to a $1.25bn hit.