Morgan Stanley on Friday became the latest firm to warn of a big one-off hit to its fourth-quarter earnings due to US tax changes.
However, in line with its peers, the investment bank also predicted the reduction in the top rate of US corporate tax from 35% to 21% would greatly benefit its bottom line over the longer term.
Morgan Stanley said that initial impact of the changes would be to reduce fourth-quarter profit by $1.25bn.
Average earnings boost
The short-term hit but long-term gain follows the recent pattern of filings on the impact of the US tax reforms from Goldman Sachs, Bank of America and Citigroup.
Analysts at Credit Suisse forecasts that the tax changes signed into law by President Donald Trump in December will boost earnings per share of major US banks by an average of 8% during 2018.