The bank plans to stick to its multiyear plan to pay out at least $60 billion in capital to shareholders even after booking a larger-than-forecast charge of $22 billion to adjust to the new tax regime
The elimination of a key deduction that had worked as a cap on CEO salaries, combined with investor pressure to maintain performance incentives, could lead to an upward drift in compensation for top executives of many banks.
Banks have been in full cost-cutting mode in recent years, but with profits expected to increase substantially as a result of tax reform, all analysts and investors want to know is how they plan to spend their tax savings.
Changing political and economic forces are raising new questions about deployment of tax savings and the cost of deposits, while old concerns about cost-cutting, credit quality and risk taking persist or return.
About a third of U.S. banks are S corporations, and many are rushing to determine whether the new tax law has robbed them of their appeal and if they should convert to traditional corporations by the March 15 deadline.
Increases in charitable donations will be more important than ever for bank reputations, as tax breaks and a lighter touch from financial regulators rekindle public anger about the financial crisis.