The 40% tax on banks’ extraordinary profits in 2022 and 2023, announced by the Italian government on Monday, and which is still awaiting parliamentary approval, led to the sinking of Italian banks on the Milan stock exchange yesterday. The effects spread to European banks, with the Portuguese BCP falling 3.54% in Lisbon. “It is a congruent measure and will encourage tax cuts and support mortgages,” said Italian Deputy Prime Minister Matteo Salvini.
DBRS estimates that the Italian government led by Giorgia Meloni could raise up to €3 billion with the new tariff. On the impact it will have on banks, the judgement says it is “a benchmark”. one out [não se repetirá] would not have a material impact on lending, given the significant improvement in bank profitability over the past few quarters, and is unlikely to substantially discourage lending.”
At the root of the Italian government’s decision to increase the tax on the banking system is the rise in interest rates, which penalizes families and businesses with bank loans and boosts banks’ profits. “The action of the Italian state is opportunistic, but only exists because the banks were not careful in their actions,” Filipe Garcia told DN/Dinheiro Vivo. The IMF economist adds that “for almost a year now I have personally been drawing attention to the risks faced by European banks by blatantly appropriating the spread between lending and lending rates. First-class risks are not financial, but reputational risks.” undermining trust between customers and banks in terms of the smoothness of the relationship, and with society in general, as they become easy targets for criticism and, now, for taxation.”
Pedro Lino, economist at Optimize, emphasizes that “the banks counted on this increase in margin to bring their capital to a very comfortable level, and to compensate shareholders, who in some cases have not received dividends for several years. With this measure, the Italian government is narrowing the scope for shareholder remuneration, in addition, other European governments will be tempted to follow this measure”.
In Portugal, the profits of the five largest banks grew by 60% in the first six months of this year to almost two billion euros. And the increased political pressure to tax these profits more would not be surprising. “While Portugal has been applying the levy to the banking sector since 2011, given the exceptional profits of the banking sector, it is possible that the government, too, will be tempted and now pressured to follow in Italy’s footsteps,” he said. Pedro Lino.
Filipe Garcia also believes that “it is very likely that this measure [do governo italiano] are suggested by various parties in Portugal, although it will also cause noise nuisance in Brussels”.
Incidentally, the Bloco de Esquerda has already submitted a bill to parliament increasing the extraordinary contribution paid by banks, pointing to “record profits”.
Carla Alves Ribeiro is a journalist for Dinheiro Vivo
Source: DN
