Magazine : Archives : The Profitability Issue

RankingBanking: The Most Profitable of the Big Banks

The year-end profitability of the biggest banks had almost nothing to do with their actual profitability. Let me explain. The Tax Cuts and Jobs Act of 2017 resulted in some of the largest banks taking huge write-offs in the fourth quarter, which made things look dismal indeed, except that they weren’t. New York-based Citigroup, for example, took a $22 billion charge related to the tax changes, including a $19 billion charge for the decreased value of its tax deferred assets under the new law. The amount was so huge, that it made the bank swing from a profit to a...