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Trump Tax Cut Means Billion-Dollar Writedowns at Banks

  • Lower corporate rate has long-term benefit, short-term hit
  • Banks built large deferred tax assets after 2008 crisis
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Big Banks Love Trump

Corrected

Donald Trump’s planned U.S. corporate tax cuts could translate to a big one-time earnings hit for many of the biggest U.S. banks, thanks to tax benefits they generated during the 2008 financial crisis.

Citigroup Inc. would take the deepest earnings hit -- perhaps $12 billion or more, according to recent estimates by the bank’s chief financial officer and several banking analysts. Mark Costiglio, a Citigroup spokesman, declined to comment. Others, including Bank of America Corp., could face writedowns of more than $1 billion.