Big Banks Reap $32B Windfall From Trump Tax Cuts: Report
Bank of America, JPMorgan, Wells Fargo and others paid 18% in taxes vs. about 30% two years ago, Bloomberg says.
Earnings at Bank of America, Citigroup, Goldman Sachs, JPMorgan, Morgan Stanley and Wells Fargo reveal the institutions reaped $18 billion in 2019, up from $14 billion in 2018, as their average effective tax rate declined to 18% last year from 20% two years ago.
Before the recent tax laws took effect, the banks paid 30%, the report said, noting that the banks cut new borrowing, slashed jobs and boosted payouts to shareholders in 2019.
These are among other trends at the six banks, Bloomberg reports:
- Outstanding loan growth was 1% last year vs. 3% in 2018;
- The banks’ collective workforce shrank by about 1,200 people over th past two years; and
- After the midyear stress tests, the six companies said they planned to raise shareholder payouts by $21.5 billion in 2019, up 14% from 2018.
The tax savings helped bank profits, with the six institutions posting $120 billion in total net income for 2019, above 2018’s tally. Prior to the tax cuts, they had not topped a collective $100 billion, according to Bloomberg.
The news service said Trump told JPMorgan wealth and asset management chief Mary Erdoes on Wednesday that the bank she works for should be grateful: “They just announced earnings, and they were incredible. They were very substantial. Will you say, ‘Thank you, Mr. President,’ at least, huh?”