Canada's Sun Life sees $200 million fourth quarter charge from U.S. tax reform

FILE PHOTO: The logo of Sun Life Financial is seen in Toronto May 6, 2015. REUTERS/Fred Thornhill/File Photo

(Reuters) - Canadian insurer Sun Life Financial said on Friday it will take a one-time charge of about $200 million in the fourth quarter due to the impact of the recently enacted U.S. tax reform.

Last month, U.S. President Donald Trump signed a $1.5 trillion tax overhaul into law, which slashed the corporate rate from 35 percent to 21 percent.

While most U.S. bank executives expect a long-term boost from the new tax code, the big lenders will first need to book multi-billion-dollar charges to adjust deferred tax assets and liabilities for the lower tax rate and also take charges related to other tax changes.

Sun Life said the estimated $200 million charge reflects the impact of the tax reform on deferred tax assets and liabilities as well as a charge on estimated repatriation of foreign earnings, among other things.

The insurer, which reports results on Feb. 14, also expects the tax expense included in its underlying net income for 2018 to decrease by about $130 million.

Reporting by Nivedita Bhattacharjee; Editing by Savio D’Souza