Capital One Financial and several other banks have disclosed the charges they expect to record in the fourth quarter due to lower values on their deferred tax assets.
President Trump signed a tax-cut bill on Friday, lowering the corporate rate to 21% from 35%. Banks’ deferred tax assets are now worth less, since future tax deductions will be lower.
Capital One, in McLean, Va., estimated that it will record a $1.9 billion fourth-quarter charge to cover the devaluation of its deferred tax asset.
Capital One disclosed the estimate in a Tuesday regulatory filing, in which the $355 billion-asset company also announced that it had resubmitted its revised capital plan, per an earlier agreement with the Federal Reserve following this year’s annual stress tests. As part of the revised plan, Capital One reduced the size of its share-buyback plan by $850 million to $1 billion.
The $30 billion-asset Associated Banc-Corp in Green Bay, Wis., will lower the value of its deferred tax asset between $14 million and $16 million, according to a regulatory filing. Associated did not provide an estimated reduction in earnings per share.
Old National Bancorp in Evansville, Ind., will cut the value of its deferred tax asset by about $41 million, less fourth-quarter adjustments, the $15 billion-asset company said in a Friday regulatory filing. The impairment will reduce fourth-quarter earnings by 28 cents, though Old National said it may amend the figure.
Beneficial Bancorp in Philadelphia estimated that its deferred tax asset will be impaired by $14 million, according to a regulatory filing. The $6 billion-asset company will record the devaluation as additional income tax expense in its fourth-quarter earnings report.
Credit Suisse will write down the value of its U.S. deferred tax assets by about $2.3 billion, the Zurich company said in a news release. Additionally, Credit Suisse said that its U.S. corporate tax liability is expected to rise as a result of the new law’s tax on services and interest payments made to affiliated companies located outside the U.S.
However, Credit Suisse said that the new tax law “will have a positive impact on the U.S. economy and our activity levels in the U.S., in particular with regard to our investment banking activities in advisory and underwriting.”
The U.S. arm of Spanish banking giant Santander has hired Swati Bhatia to oversee retail banking and its digital transformation efforts. Bhatia joins at "an inflection point" for the company, which aims to be "a digital bank with branches," CEO Tim Wennes said.
Mariya Rosberg is named Americas head of banking and financial services at Marsh McLennan's Oliver Wyman unit; startup ZayZoon raised $15 million in a new funding round; and more in the weekly banking news roundup.
Last year, the Raleigh, N.C.-based Integrated called off a deal to sell itself to MVB Financial after bank stocks took a hit in the aftermath of the regional bank failures. Capital hopes to expand its government-guaranteed lending with the transaction.
Once a prominent figure spurring financial institutions to engage in cryptocurrency, Bankman-Fried's downslide began with the collapse of the digital asset exchange FTX in late 2022 and hit rock bottom with his sentencing to 25 years in prison.