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2018-01-16 — bloomberg.com

As big U.S. banks weigh how to divvy up their windfall from a massive U.S. tax cut, Citigroup Inc.'s approach appears to be set: Shower profits on investors. Lower tax rates mean the bank can 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 bank said Tuesday. Executives had braced investors last month for a $20 billion hit.

Banks face competing demands for a slice of the gains -- potentially raising pay for staff, cutting prices for clients or plowing more into charity. Wells Fargo & Co. executives said last week they'll boost donations to a philanthropic foundation, while JPMorgan Chase & Co. leaders said they're working on a plan to share the tax savings. Citigroup's statement announcing quarterly results only called out the cash coming investors' way.

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The bank took a bigger up-front hit from the changes because it had been sitting on a massive pile of deferred-tax assets -- a form of IOU that cuts tax bills. The company had accrued them by suffering losses during the financial crisis, then long touted them as a way to burnish future payouts to investors. But the tax overhaul wiped out almost half of their value.

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