Italy clears bank tax. Italian financial institutions plunged 9,000 million in the stock market on Tuesday, prompting the far-right government of Giorgia Melonia to trim the race hours after the surprise announcement. 40% tax on extraordinary bank profits. Milan Stock Exchange lost 2.12% this Tuesday in market capitalization of 27,710m euros.
The Italian Ministry of Economy and Finance, in a statement yesterday at the closing of the stock markets, explained how the tax will be applied, which aims to help investors. Aims to reduce taxes on mortgage holders and families and increase nearly 2,000 million. Specifically, it limits the extraordinary tax to 0.1% of banks’ total assets in 2022 and 2023 and will not exceed 25% of net assets. The change was made by the department headed by Giancarlo Giorgetti. maintaining the stability of banking institutions.
Prices of Italian banks collapsed after the surprise announcement of a new tax on the industry this Tuesday, recouping some of the losses it suffered this WednesdayAfter clarifications on the scope of the tax provided by the Ministry of Economy and Finance of the Transalpine country.
Thus, at the close of Wednesday’s Milan Stock Exchange session, Shares of organizations such as Banco BPM rose 5.45% and UniCredit’s shares rose 4.37%, while Mediolanum shares gained 2.68%.2.47% from Banca Monte dei Paschi di Siena, 2.33% from Intesa Sanpaolo and 2.21% from Bper.
Mediobanca shares, which managed to save the sector from the crisis with a decrease of 2.48 percent yesterday, fell behind at the close with an increase of 1.04% today. The recovery of Italian banks had limited repercussions at the continental level for the price of the Stoxx Banks sub-index, which brings together the main banking assets in the eurozone. It has rebounded by 1.3% this Wednesday after falling 3.54% in this Tuesday session.
The rule is also It will be activated if the interest margin recorded in 2022 increases by more than 5% compared to 2021.According to the manager, 2023 will increase to 10 percent compared to the previous year. The bank’s interest margin, beyond commissions and selling products such as funds and insurance, is its traditional business: the difference between what it earns on loans and what it pays to obtain financing through bank deposits.
The new tax, which was surprisingly announced after the Cabinet this Tuesday, could mean around €2,500m for the six biggest Italian banks. Intesa Sanpaolo, Unicredit, Banco BPM, Monte dei Paschi di Siena and BPER BancaIn the first half of 2023, after posting profits in excess of 10,500 million euros, more than double that of 2022.
“Tax will cost banks billions of euros, but does not materially change your solvency. According to our preliminary calculations, The impact of the largest banks on CET1 rates will range from 20 basis points to 100 basis points.. “While this is no small amount, we believe it can be offset, at least in part, by adjustments in capital distribution plans—dividend payments,” explains Marco Troiano, head of ratings for financial institutions at Scope Ratings.
The smallest banks will also be exempted for their part from this extraordinary tax, which follows the interest rate hikes of the European Central Bank (ECB) and triggers the interest margin of European banks. They will also be exempt from this tax. Financial institutions that have already increased their deposit fee To savers as recommended by the Bank of Italy on 15 February. It should be noted that the competition in the Italian sector is somewhat greater than in the case of Spain, with a large network of regional organizations.
The Meloni Government explains in a statement that the measure “comes as a result of the regulations already in place in Europe in terms of non-bank margins”. Spain, the Czech Republic and Hungary agreed on extraordinary taxes on bank profits, France on temporary ceilings. new taxes to Sweden on the balance and a contribution of €1,400 million to Belgium’s Deposit Guarantee Fund, at a rate of 2% on commissions from institutions. In the case of Spain, extraordinary tax 4.8% interest margin plus commissions from activities of organizations in the country and excludes international trade.
stock recovery
On the same Wednesday, calm returned in the markets and the biggest gains at the open were recorded by financial institutions. In the case of ibex 35, all banks are doing positive transactions, With increases going from 1.59% to 0.6% in the Banco Sabadell example, to the more moderate Bankinter.
Finecobank 5%, Monte dei Paschi di Siena 4.3%, Unicredit 3.9%, BPM 3.4%, BPER Banca, Mediolanum e Intesa Sanpaolo 3% recovery in Milan Stock Exchange FTSE Mib