WASHINGTON — The nation’s banks are finding a lot to love about the Trump administration’s tax cuts.
The $1.5 trillion tax overhaul signed into law late last year provided deep and lasting tax cuts to all types of businesses, but financial institutions are among the biggest winners so far, reaping benefits from a lower corporate rate and more preferable tax treatment for so-called pass-through companies, which include many small banks.
While some of the biggest banks are reporting fourth-quarter earnings hits stemming from the new tax law, they see rich benefits over the long term, including effective tax rates that are even lower than the new 21 percent corporate rate.
Citigroup said on Tuesday that it would take a one-time $22 billion hit from the tax law, largely related to the bank’s tax-deferred assets, which now must be recalibrated to reflect the lower corporate rate. In a news release, Citigroup’s chief executive, Michael Corbat, said the law nevertheless “not only leads to higher net income and increased returns, but also serves to strengthen our capital generation capabilities going forward.”
