US banks face more taxing issues than meets the eye

While tax reform charges make a bad year worse for US banks, the timing of the law sets the scene for better results in 2018. But the fundamentals may not change: trading is bad, financing is good.

The US Tax Cuts and Jobs Act, implemented in December, could not have come at a better time for banks wanting to sink the results of their poorly performing markets businesses into a swamp of one-off tax charges.

Its timing enabled them to load up what was already a poor fourth quarter with big hits to their after-tax profits, rather than have those spill into what may well be a much more positive first quarter of 2018.

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