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Trump’s Tax Cut Means Billion-Dollar Write-downs for U.S. Banks

Lower tax rate would affect the large deferred tax assets banks accumulated after the 2008 crisis.

By Lynnley Browning, Bloomberg | Updated on November 30, 2016

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. and Wells Fargo & Co. could face multibillion-dollar write-downs.

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