Page 25 - ARUBA TODAY

BUSINESS Monday 15 January 2018
A25

Bank execs sing praises of new tax law as windfall looms

By KEN SWEET try as well. “The moderniza- sets. Because the new tax
AP Business Writer tion of the U. S. tax code is bill lowered the corporate
NEW YORK (AP) — Two of a significant step forward tax rate to 21 percent, the
the nation’s biggest banks for the company and a big value of those tax-deferred
— JPMorgan Chase and win for the economy,” said assets had to be written
Wells Fargo — indicated Marianne Lake, JPMorgan down. The $2.4 billion one-
this weekend that they Chase’s chief financial of- time charge covers the
expect to see significant ficer, in a conference call change in value of those
future benefits from the re- with investors. assets. Other banks, like
cently enacted GOP tax JPMorgan executives say Bank of America, Citigroup
bill, through both lower tax- they expect to pass along and Goldman Sachs are
es and increased business. some of the benefits, cur- expected to take similar
The comments came as rently in unnamed ways, to actions as they report their
the two companies report- consumers, its employees results over the next couple
ed their quarterly results, and its shareholders. The of weeks. JPMorgan now
which were both heavily bank already raised its min- expects its effective corpo-
impacted by the change imum wage to $15 an hour rate tax rate to be roughly
in tax laws, but in different before the tax bill passed, 20 percent. In comparison,
ways. JPMorgan Chase but further wage increases JPMorgan paid an effec-
took a $2.4 billion charge could be on the table. Wells tive tax rate of 28.4 percent
tied to the tax bill, while Fargo announced shortly in 2016 and a tax rate of
Wells Fargo had a $3.35 bil- after the bill was passed 31.9 percent in 2017. The
lion benefit. it would raise its minimum change will save JPMorgan
Bank executives and their wage to $15 an hour as billions of dollars over the
lobbyists in Washington well. Wells Fargo CEO Timo- coming years. The bank
were big promoters of a thy Sloan said he estimates This photo combo of file images shows signage at branches paid $9.8 billion in income
corporate tax cut. Banks 70,000 employees at Wells of Wells Fargo and Chase banks in New York. Wells Fargo and taxes in 2016.
JPMorgan Chase indicated this weekend that they expect to
are among the highest- Fargo will benefit during a see significant future benefits from the recently enacted GOP Wells Fargo is unique in
taxed industries, largely be- conference call with inves- tax bill, through both lower taxes and increased business. that it had deferred tax li-
cause they operate here in tors. The tax department of (AP Photo/CX Matiash, Frank Franklin II) abilities, not assets, on its
the U.S., and have regularly JPMorgan has been “work- pact, however. deferred assets on its bal- balance sheet, basically
paid effective tax rates of ing around the clock for But before JPMorgan can ance sheet. These are ba- income taxes it may owe
30 percent or more. JPM- many months leading up benefit from the new tax sically credits it could have in the future. Wells Fargo
organ CEO Jamie Dimon to the passage” of the tax law, it had to take a signifi- used to pay future income some of its $7 billion of de-
and other company exec- bill, Lake said, calling the cant one-time charge. taxes. These credits built ferred tax liabilities and re-
utives for years said a lower bill “extraordinarily compli- Like many banks after the up after the big Wall Street corded a $3.35 billion gain.
tax rate would not only be cated.” Lake and execu- 2008 financial crisis, JPMor- banks took billions of dol- Wells Fargo now expects its
good for JPMorgan, but ul- tives at other banks are still gan had billions of dollars lars in losses from bad mort- effective annual tax rate to
timately good for the coun- assessing the law’s full im- of what are known as tax- gages and other toxic as- be around 19 percent. q

CVS says it will keep Aetna in Connecticut’s capital city

By SUSAN HAIGH lyn Castel, CVS Health’s which saw General Electric Malloy took Friday’s an- tive.
Associated Press vice president of corporate move its headquarters from nouncement by CVS as “It’s a choice that’s made
HARTFORD, Conn. (AP) — communications, in a writ- the state to Boston. confirmation that Con- in the context of an acqui-
CVS Health Corp. said this ten statement. It prompted officials to re- necticut is a “tremendous sition. And we’re glad they
weekend it has “no plans” She noted that while CVS examine how they could place to do business” with made that choice.”q
to move Aetna from Con- Health will continue to be dissuade companies from talented workers and a
necticut’s capital city, headquartered in Woon- relocating to places con- good quality of life.
reversing last year’s an- socket, Rhode Island, the sidered more innovative. “My administration will
nouncement by the insur- drugstore chain and health Bronin, who is mulling a run continue to work with CVS
ance giant that it would benefits company also op- for governor, said at the Health’s leadership team to
move its headquarters to erates “a number of large time that “losing Aetna’s ensure that their footprint in
another state after nearly corporate hubs, or cen- flag” would be a blow to Hartford is maintained not
two centuries in Hartford. ters of excellence, in other the state and greater Hart- only for the short-term but
The statement came the states, including Arizona, Il- ford and that the state in the long-run as well,”
day after CVS officials met linois and Texas.” must act boldly. Malloy said.
with Hartford Mayor Luke CVS Health announced in While Aetna promised The co-chairmen of a state
Bronin and Gov. Dannel P. December it was buying to keep its Connecticut- commission that’s recom-
Malloy, both Democrats, Aetna. based employees and its mending ways to improve
and days after New York At that time, Aetna said all Hartford campus, Mark Ber- Connecticut’s economic
City halted a $9.6 million of its locations would be tolini, Aetna’s chief execu- stability and growth ac-
incentive package to lure evaluated as part of the tive officer, said last Janu- knowledged the news of
Aetna. merger. ary that the insurer wanted Aetna staying in Hartford
“We have no plans to re- Aetna traces its roots in to broaden its access “to was good for the state but
locate Aetna’s operations Hartford to the 1800s. It em- innovation and the tal- warned that big problems
from Hartford and, in fact, ploys about 6,000 people in ent that will fill knowledge remain.
view Hartford as the future the state. economy-type positions.” “It’s not a harbinger of any-
location of our center of News of the headquarters He also referred to Con- thing,” said Jim Smith, one
excellence for the insur- moving was seen as an- necticut’s continuing state of the panel’s co-chairmen
ance business,” said Caro- other blow to Connecticut, budget woes. and a retired bank execu-