Citigroup Inc could write down some $5 billion to $10 billion in expected future tax benefits if the United States decreases corporate tax rates, veteran banking analyst Mike Mayo estimated on Monday.

Any writedowns linked to the proposed U.S. tax changes could be significant, the bank said in a regulatory filing on Friday, without providing a forecast.

Mayo, of brokerage CLSA Asia-Pacific Markets, has long argued Citigroup should write down the value of its deferred tax assets, because there is a chance it will not generate enough taxable income to use the tax benefits before they expire.

The third-largest U.S. bank by assets has $52.1 billion of these tax benefits, known as deferred tax assets, on its books.

Citigroup spokesman Jon Diat declined to comment.

The $52.1 billion is almost a third of Citigroup's net worth as a company as measured by the net accounting value of its assets, or book equity.

Bank of America Corp also said in a regulatory filing on Friday that a change in the U.S. corporate tax rate could affect its deferred tax assets and possibly have an adverse affect on its operations. The largest U.S. bank has about $27.1 billion in deferred tax assets.

Citi by a long shot has the highest level of such assets in the banking industry, Mayo said on Monday.

Certainly, this is of a magnitude that you'd expect the company to do whatever they can. But they still can't escape that they have the largest deferred tax assets by a wide margin and they would be hurt the most in the industry if the U.S. reduces corporate tax rates, he said.

U.S. President Barack Obama has proposed reducing corporate tax rates to stimulate the economy, but he wants to do that by trimming tax breaks now cherished by many in the corporate sector, so as not to add to the deficit.

(Reporting by Maria Aspan; additional reporting by Kim Dixon in Washington and Joe Rauch in Charlotte; editing by Andre Grenon)

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