Italian Bank Shares Recover After Government Set Cap on Windfall Tax
August 09 2023 - 4:03AM
Dow Jones News
By Giulia Petroni
Shares in Italian banks trade higher on Wednesday after the
Italian government set a cap for the proposed windfall tax on
lenders' extra profits in a move to reassure markets.
At 0808 GMT, shares in Intesa Sanpaolo and UniCredit are up 2.5%
and 3.4%, respectively. Smaller banks Banco BPM and BPER Banca are
up 2.9% and 2.7% respectively, while Banca Monte dei Paschi di
Siena trades 3.4% higher.
The Ministry of Economy and Finance said in a statement that
proceeds from the tax wouldn't amount to more than 0.1% of lenders'
total assets in order to safeguard the banking system's
stability.
"The news is positive for the banking sector as it more clearly
defines the effects of the one-off taxation that, as currently
formulated, is expected to have much smaller impacts," said Equita
Sim's Andrea Lisi.
The shares recovering comes after the surprise announcement of
the new tax sparked a market selloff on Tuesday. The government
agreed on a one-off 40% windfall tax on the income made from higher
interest rates in 2023 or 2022, whichever is higher. Parliament
still needs to pass the legislation to introduce the levy.
Other European countries such as Spain and Hungary have adopted
similar taxes and, according to analysts, Italy's move could result
in other countries imposing bank taxes or levies to claw back
profits.
Write to Giulia Petroni at giulia.petroni@wsj.com
(END) Dow Jones Newswires
August 09, 2023 04:48 ET (08:48 GMT)
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