Savings for the top six U.S. banks from President Trump’s signature tax overhaul accelerated last year, now topping $32 billion as the lenders curbed new borrowing, pared jobs and ramped up payouts to shareholders.

JPMorgan Chase & Co., Bank of America Corp., Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley posted earnings this week showing they saved $18 billion in 2019, more than the prior year, as their average effective tax rate fell to 18% from 20%. Bloomberg News calculated the haul by comparing the lower tax rates to what the banks paid before the law took effect, which averaged 30%.

Debate has raged over the tax overhaul’s impact since Trump signed it into law near the end of his first year in office, with critics saying it worsens inequality by favoring the wealthy and inadequately stimulates economic growth. Because banks used to pay higher tax rates than many other industries, they were among the biggest beneficiaries.


Proponents predicted lowering rates would give lenders more cash to fuel the economy, helping companies invest in expansion, hire workers and raise pay.

Here are the trends at the top six banks since then:

Growth in their outstanding loans slowed to 1% last year, down from 3% in 2018, which was unchanged from 2017.

They collectively shrank their workforce by about 1,200 people by the end of 2019 from two years earlier. To be sure, hiring and firing was mixed among the six lenders, and some raised base pay or enacted special bonuses. Some also updated investors this week on investments in technology to automate jobs.

Shareholders were big beneficiaries. After banks cleared the Federal Reserve’s midyear stress tests, the group announced plans to boost stockholder payouts by $21.5 billion, an increase of 14%.

The tax savings have spurred the banks to record profit. The six firms posted $120 billion in net income for 2019, inching past 2018’s mark. They had never surpassed $100 billion before the tax cuts.

JP Morgan Chase reported the biggest profit for any bank in history this week, $36.4 billion in 2019, up 21% in the fourth quarter.


On conference calls with analysts to discuss earnings this week, some bank executives predicted the tax rates might tick back up slightly to a level between that of 2018 and the rate in 2019. That suggests some of last year’s savings may also have been attributable to temporary factors. But in at least one case, a bank’s rate was elevated last year by legal expenses that weren’t tax deductible.

Trump, who’s also pushed to ease financial regulation, indicated Wednesday he was aware his efforts had helped banks boost profits. At a gathering of corporate leaders to celebrate his trade deal with China, he greeted a senior JPMorgan Chase executive by suggesting the bank thank him.

“They just announced earnings and they were incredible,” the president said of the nation’s largest bank. “I made a lot of bankers look very good. But you’re doing a great job.”