Credit Suisse to write-down $2.3 billion due to changes in U.S. tax law

The Swiss banking giant stated it will provide a more detailed report on the impact of the U.S tax bill on its operations in its fourth quarter report, scheduled to be published on Feb. 14.

Swiss banking giant Credit Suisse disclosed, it expects to write-down $2.3 billion (2.3 billion Swiss francs) in the fourth quarter of this year following changes in the U.S. tax code.

The tax overhaul, signed into law by U.S. President Donald Trump on Friday, will result in Credit Suisse, Switzerland’s second biggest lender, having to downgrade the value of its deferred tax assets.

This is likely to result in Credit Suisse reporting a net loss for the full year, making it its third straight annual loss. In the first 9 months of 2017, it reported a net income of 1.1 billion francs.

Credit Cuirse has portrayed the loss as a one-time accounting adjustment with a “minimal impact” on its regulatory capital position and has maintained that the policy decision it took for returning capital to shareholders, announced at its Investor Day, remains unchanged.

The write-down figure is higher than its previous estimate of 2.1 billion Swiss francs.

On Friday, the firm had also stated, it expects to face a larger U.S. corporate tax liability due to the introduction of a new tax on services and interest payments to affiliated companies outside of the U.S.

The tax changes in the U.S. will boost its activity levels in the U.S., especially in the investment banking sector.

Credit Suisse said, it would provide more details on the impact of the historic U.S. tax bill on its business in its fourth quarter results which it will publish on February 14.

($1 = 0.9891 Swiss francs)

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