Switzerland-based Credit Suisse Group AG expects the new U.S. Tax Cuts and Jobs Act, implemented Dec. 22, to lead to a one-time value reduction of approximately CHF2.3 billion to its deferred tax assets for the fourth quarter of 2017.
As the tax act sets new taxes on services and interest payments to affiliated companies based outside the U.S., the bank expects its U.S. corporate tax liability will rise. Full accounting effects may be subject to revision depending on guidance from U.S. authorities.
Credit Suisse said it expects that the write-down to tax assets will have a minimal impact on its regulatory capital position. The bank's look-through common equity Tier 1 ratio stood at 13.2% at the end of the third quarter, and it is targeting a ratio of more than 12.5% from 2018 to 2020.