Deutsche Bank posts third consecutive annual loss in 2017

The loss of €497 million at Germany’s flagship lender fell short of expectations of analysts, who had forecast a loss of €290 million. (Reuters)
Updated 02 February 2018
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Deutsche Bank posts third consecutive annual loss in 2017

FRANKFURT: Deutsche Bank on Friday posted its third consecutive annual loss in 2017, taking a hit from challenging markets, a drop in investment bank revenue and a US tax reform.
The loss of €497 million at Germany’s flagship lender fell short of expectations of analysts, who had forecast a loss of €290 million, according to a Reuters poll of nine banks and brokerages.
The bank warned last month that it would post a loss for the year.
“We believe we are firmly on the path to producing growth and higher returns with sustained discipline on costs and risks,” Chief Executive John Cryan said in a statement. “We have made progress, but we are not yet satisfied with our results.”
The bank ended 2017 on a rough note. Revenue dropped 19 percent to €5.7 billion in the fourth quarter, while the net loss widened to €2.19 billion from €1.89 billion in the year-earlier period.
Both figures were weaker than consensus, with analysts on average forecasting €6.2 billion in revenue and a €1.95 billion loss, according to a Reuters poll.
Revenue at Deutsche Bank’s cash-cow bond-trading division dropped by 29 percent due to lower client activity in less volatile markets. Competitors have seen similar declines.


Singapore woes ring trade alarm bells

Singapore has long been viewed as a barometer of the global demand for goods and services. (AFP)
Updated 22 July 2019
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Singapore woes ring trade alarm bells

  • Governments have slashed economic growth forecasts, and gauges in several countries measuring activity in the manufacturing and services sectors paint a bleak picture

SINGAPORE: A plunge in exports and the worst growth rates for a decade have fueled concerns about the outlook for Singapore’s economy, with analysts saying the figures offer a warning that Asia is heading for a slowdown as China-US tensions bite.
While it may be one of the smallest countries in the world, the export hub is highly sensitive to external shocks and has long been viewed as a barometer of the global demand for goods and services.
The affluent city-state is highly dependent on trade and has traditionally been one of the first places in Asia to be hit during global downturns — with ripples typically spreading out across the region. The latest signs are not good. In June, exports collapsed 17.3 percent from a year earlier, the fastest decline in more than six years, led by a fall in shipments of computer chips.
That followed a shock 3.4 percent quarter-on-quarter contraction in GDP in the second quarter. Year-on-year growth came in at just 0.1 percent, the slowest pace since 2009 during the global financial crisis.
“Singapore is the canary in the coal mine,” Song Seng Wun, a regional economist with CIMB Private Banking, told AFP. “And what it tells us is that it is a tough environment.”
To warn of danger, miners used to bring caged canaries underground with them as the birds would die in the presence of even a small amount of poisonous gas — signaling to workers that they should make a swift exit.

BACKGROUND

In June, exports in Singapore collapsed 17.3 percent from a year earlier, the fastest decline in more than six years, led by a fall in shipments of computer chips.

While steadily weakening growth in China is partly to blame for a slowdown in exports, analysts say the trade war between the US and China has dramatically worsened the situation.
While Singapore — a transit point for products heading to and from Western markets as well as the Asian base for manufacturers of some hi-tech goods — may be showing the strain most, negative data has emerged throughout the region.
Exports have been slipping across Asia. In India they plummeted 9.7 percent in June, in Indonesia, Southeast Asia’s biggest economy, they dropped 8.9 percent in the same month while in South Korea they slipped 10.7 percent in May.
Governments have slashed economic growth forecasts, and gauges in several countries measuring activity in the manufacturing and services sectors paint a bleak picture.
Central banks are moving to spur domestic consumption, with Indonesia and South Korea cutting interest rates Thursday, the latest in Asia to lower borrowing costs.
Singapore’s central bank is seen as likely to ease monetary policy at an October meeting, and some economists are predicting the country could fall into recession next year.
“There are no winners in this trade war. While most of the attention has focused on the trade conflict between China and the US, the damage has not been confined to these two economies,” business consultancy IHS Markit said in a commentary.