Morgan Stanley to take $1.25 billion Q4 earnings hit from US tax overhaul

The net blow of the bill to the bank will include about a $1.4 billion net discrete tax provision, mainly due to the remeasurement of certain net deferred tax assets using the lowered corporate tax rate, the company said in a filing. (Reuters)
Updated 05 January 2018

Morgan Stanley to take $1.25 billion Q4 earnings hit from US tax overhaul

BENGALURU: Morgan Stanley said on Friday it would take a $1.25 billion hit in its fourth-quarter earnings due to a cut in corporate tax rate as part of the US tax code overhaul. The net blow of the bill to the bank will include about a $1.4 billion net discrete tax provision, mainly due to the remeasurement of certain net deferred tax assets using the lowered corporate tax rate, the company said in a filing.
It would be offset by $160 million in other positive effects, Morgan Stanley added.
The sweeping tax code changes enacted in late December cuts the corporate tax rate to 21 percent from 35 percent and were expected to mean short-term pain, but long-term gain for US-based corporations.
Scores of large companies, including big banks such as Citigroup and JPMorgan Chase & Co, have socked away an estimated $2.8 trillion overseas in recent years.
The one-time tax on those earnings is expected to raise $339 billion in federal revenues over the coming decade, according to the Joint Committee on Taxation, a nonpartisan research arm of the US Congress.
Morgan Stanley’s arch rival Goldman Sachs Group had said on December 29 it expects its fourth-quarter earnings to decrease by about $5 billion due to repatriation tax, the cost of moving money from foreign countries to the US, Goldman said in a filing.


IMF experts visit Lebanon amid worsening economic crisis

Updated 20 February 2020

IMF experts visit Lebanon amid worsening economic crisis

  • IMF team will provide broad technical advice
  • Lebanon has not requested IMF financial assistance

BEIRUT: A team of IMF experts met Prime Minister Hassan Diab on Thursday at the start of a visit to provide Lebanon with advice on tackling a deepening financial and economic crisis, an official Lebanese source said.

The IMF has said the team will visit until Feb. 23 and provide broad technical advice. Lebanon has not requested financial assistance from the Fund.

The long-brewing economic crisis spiraled last year as capital flows into the country slowed and protests erupted against the ruling elite over decades of corruption and bad governance.

Diab’s government, which took office last month, must decide what to do about upcoming debt payments, notably a $1.2 billion dollar-denominated sovereign bond due on March 9.

Lebanese President Michel Aoun meanwhile said on Thursday measures would be taken to hold to account all those who contributed to Lebanon’s financial crisis through illegal actions be they transfers abroad, manipulation of Eurobonds or other acts.

“There is information that we are still in need of with regards to the banking situation. There are measures that we will take to hold to account all who participated in bringing the crisis to where it is,” Aoun said, according to his Twitter account.

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One of Lebanon’s most influential politicians, Parliament Speaker Nabih Berri, said on Wednesday that debt restructuring was the best solution for looming maturities.

Lebanon will on Friday review proposals from firms bidding to give it financial and legal advice on its options, a source familiar with the matter said on Thursday. The government aims to take a quick decision on who to appoint, the source said.

So far, firms bidding to be Lebanon’s legal adviser are Dechert, Cleary Gottlieb, and White and Case, the source said.

Lebanon has issued requests for proposals to seven firms to provide it with financial advice.

The government on Wednesday formed a committee tasked with preparing an economic recovery plan that includes ministers, government officials, a central bank representative and economists, according to a copy of a decree seen by Reuters.