BBVA Tax Debates and Half-Year Earnings Highlight Bank Sector Dynamics

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BBVA’s Position on Tax Proposals and H1 Financial Highlights

BBVA’s chief executive, Onur Genç, projects that a government-imposed tax on banks could reduce the company’s accounts by around 250 million euros in the first year, based on the figures from the bank’s 2021 fiscal year, which tallied 4.653 million euros in earnings. The director indicated that the bank would explore every option, including forensic probability, once full details about the foreclosure are in hand.

The governing coalition parties, PSOE and United We Can, filed a bill this Thursday in the House of Representatives. The plan contemplates a temporary 4.8% tax on commissions and a levy on net interest income from banks to raise 3,000 million euros over the next two years, with an additional 4,000 million euros projected every two years through a 1.2% levy on energy company sales.

BBVA Records a 57% Jump in First Half Earnings to 3,001 Million Euros

Genç stressed that such a tax would be detrimental to Spain, arguing that the banking sector largely avoids negative externalities and that the economy benefits from a robust banking system. He noted that a tax is appropriate only when a sector imposes costs on society; banking, in his view, does not fall into that category. The emphasis should be on stimulating banking activity to support growth rather than dampening it, he asserted.

Genç also warned that the current environment is not favorable for drastic fiscal measures. Persistent inflation and rising interest rates create a marked backdrop for policy choices. In the same vein, José Antonio Álvarez of Banco Santander suggested steering the debate toward investment and production—such as solar energy—rather than new taxes. He argued that a tax on banks could reduce lending capacity by about 50,000 million euros, potentially hindering the financing of solar panel projects and other investments the country needs to expand renewable energy capacity.

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Genç emphasized that the banking sector has not received unusual gains in recent times. What stands out is the environment of negative interest rates over the past decade, he noted. Between 2011 and 2021, the return on equity for the Spanish banking sector averaged negative territory, suggesting a double-digit improvement would have been expected in a growing economy. In this context, the dynamics favor steady profitability for banks when the economy expands, and the same principle applies to the broader financing landscape as interest rates adjust and growth resumes.

Overall, the dialogue around taxation, lending capacity, and investment points to a broader national conversation about how best to balance regulatory measures with the need to fund growth and energy transition projects. The stakes include consumer credit, business lending, and the financing environment that supports infrastructure and renewable energy development. These considerations shape the ongoing debate among policymakers, financial institutions, and market observers looking for a stable path forward.

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