Goldman: $5B profit hit caused by tax
Dec. 29, 2017 at 11:02 p.m.
Goldman Sachs said the U.S. tax reform will cut profit this year by about $5 billion, mainly because of a tax targeting earnings held abroad.
About two-thirds of the hit comes from the repatriation tax, while writing down U.S. deferred tax assets also contributed, the company said in a filing on Friday.
While bank stocks have rallied on the tax bill's lower corporate rates, the new law requires charges in the near-term as foreign earnings face taxation and the value of deferred tax assets declines.
Citigroup expects a hit of as much as $20 billion, while Bank of America will take a $3 billion charge.