Barclays has said Donald Trump’s US tax changes will knock about £1bn off its profits.
The bank said the bill, which was signed into law last week, would make it harder for it to deduct past losses from future tax bills.
Barclays said the change had reduced the value of its “deferred tax assets” and would result in an associated one-off charge of about £1bn after tax.
It is expected to drag Barclays’ full-year earnings further into the red. The bank lost £628m in the first nine months of the year due to write-offs related to pulling out of African ventures.
Despite the short-term hit, the bank said it expected the tax changes, under which the US corporate tax rate will be cut from 35% to 21% from 1 January, to “positively impact” its future earnings.
Shell also welcomed the tax changes, but said its profits would take a $2bn-$2.5bn (£1.5bn-£1.9bn) hit this year as it factored in the impact on deferred tax assets.
“Royal Dutch Shell expects the potential economic impact of the recently enacted US tax reform legislation to be favourable to Shell and to its US operations, primarily due to the future reduction in the US corporate income tax rate,” the company said.
Companies across the world will be forced to take similar actions. In the US, Bank of America, Citigroup, AIG, and the mortgage providers Fannie Mae and Freddie Mac are expected to swallow writedowns of almost $50bn. Switzerland’s UBS said it expected a SFr3bn (£2.3bn) hit and Credit Suisse expects the tax changes to reduce its earnings by SFr2.3bn.
Trump said the biggest overhaul of the US tax system since the 1980s would be “fantastic for the economy”.
“Corporations are literally going wild over this, I think even beyond my expectations, so far beyond my expectations,” he said.
But opponents have said the changes are a gift for rich people, with the Washington DC-based thinktank the Center for American Progress finding that he will save up to $15m a year.
Last week, the US president insisted a typical family of four would benefit, saying “the numbers will speak”, adding that the bill was “not good” for him personally.