It was entitled "What Financial Reform Could Cost the Largest U.S. Banks," but a report Tuesday from Standard & Poor's was perhaps most notable for what it says the new rules won't change: credit ratings.

By the time the Dodd-Frank Act starts hitting bank earnings in full force, which S&P expects to happen in 2012 or 2013, banks should be showing improvements in net chargeoffs that will offset the legislation's bottom-line effects. "As a result, we don't expect that the earnings impact from Dodd-Frank, by itself, will result in lower ratings for the largest U.S. banks," S&P credit analyst Stuart Plesser said.

But that assessment is predicated on two key assumptions: that the U.S. economy does not enter a double-dip recession, and that U.S. banks manage to contain foreclosure costs.

If those assumptions hold, then a projected decline in provisioning for loan losses should allow banks to make up for higher deposit insurance costs, lower debit card fees and a loss of income from proprietary trading and derivatives trading, according to the report.

"A return to more typical banking conditions would, in our view, mitigate most, or even all, of the financial costs of Dodd-Frank for these banks," Plesser said.

For the eight large banking companies examined in the report, Dodd-Frank will have an aggregate pretax earnings impact of $19.5 billion to $22 billion annually before any offsets.

The projection includes an estimated $4.5 billion to $5 billion impact from the Durbin amendment on debit fees; a $5.5 billion to $6 billion hit to derivatives income; a $3.5 billion to $4 billion cost to replenish the deposit insurance fund; a $2.5 billion to $3 billion tab for legal and compliance expenses tied to the implementation of the new rules; and a $3.5 billion to $4 billion reduction in proprietary trading activity, the impact of which will be limited to only a few banks.

Of course, estimating the earnings impact of Dodd-Frank still requires much guesswork, S&P warned, because dozens of studies requested in the bill still need to be conducted, and close to 300 rules that Congress put into the hands of regulators still must be written.

The report focused these companies: Bank of America Corp., Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley, PNC Financial Services Group Inc., U.S. Bancorp and Wells Fargo & Co.

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