Bank Executives Expect a Boost from New Tax Law, But Not Before Taking a Hit
Monday, January 8th, 2018 -- 7:59 AM
(Reuters) -U.S. bank executives and investors expect a long-term boost from the new federal tax code, but the biggest lenders will first need to book multi-billion-dollar charges that will muddle fourth-quarter results.Banks will adjust deferred tax assets and liabilities to account for a lower corporate rate, and also take charges related to other tax changes. But analysts said the overall benefit from lower taxes will make up for any short-term hit. Citigroup Inc could report a quarterly loss of more than $15 billion and Goldman Sachs Group Inc will likely have lost about $3 billion, based on analyst estimates and recent profit warnings.
JPMorgan Chase & Co, which reports first on Friday morning, could show a 35 percent plunge in net income from a year earlier. Bank of America Corp, which reports the following Wednesday, could show a 50 percent drop.
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