To tax income from gap in lending, deposit ratesGovt had criticised lenders for keeping deposit rates lowBanks have earned record profits in recent quarters<\/p>\n
ROME, Aug 8 (Reuters) – Italy dealt a surprise blow to its banks and sent shockwaves across the sector in Europe by setting a one-off 40% tax on profits reaped from higher interest rates, after reprimanding lenders for failing to reward deposits.<\/p>\n
Sharply higher official interest rates have yielded record profits for banks, as the cost of loans soared while lenders held off paying more on deposits.<\/p>\n
\u767b\u9332\u3059\u308b \u3053\u3053.<\/p>\n
Countries such as Spain and Hungary have already imposed windfall taxes on the sector and others may now follow suit.<\/p>\n
Italian Prime Minister Giorgia Meloni’s government had floated the idea earlier in the year, but appeared to have cooled on the plan.<\/p>\n
A senior banking executive told Reuters that lenders had been ready for “the chopping block, but then the axe didn’t come down”.<\/p>\n
Since then, however, bumper first-half results from banks brought the issue back into focus and prompted the government to act on the eve of the summer political shutdown.<\/p>\n
One government source said the move came as a surprise even to some ministers at Monday night’s cabinet meeting. A second source made clear the government intended “to punish banks’ unfair behaviour”.<\/p>\n
Lenders in Italy have passed on to depositors on average 12% of the rise in rates, versus 22% in the euro area, Jefferies calculated.<\/p>\n
“One has only to look at banks’ first-half profits … to realise that we are not talking about a few millions, but … of billions,” Deputy Prime Minister Matteo Salvini told a news conference in Rome late on Monday.<\/p>\n
“If (it is true that) the burden deriving from the cost of money has … doubled for households and businesses, what current account holders receive has certainly not doubled,” Salvini said.<\/p>\n
Italy’s banking share index had plunged 7.3% by 1515 GMT on Tuesday, with sector leader Intesa Sanpaolo (ISP.MI), opens new tab down 8.6% and rival UniCredit (CRDI.MI), opens new tab down 5.8%. Italian banks dragged the European index (.SX7E), opens new tab down 3.7%, with a Moody’s downgrade of some U.S. banks also weighing.<\/p>\n
Italian banks are up 50% over the past year, outperforming a 20% European sector rise.<\/p>\n
\u30a2\u30a4\u30c6\u30e0 1 \u306e 2 Matteo Salvini, Italian infrastructure minister and deputy PM, attends a news conference for the government’s first budget in Rome, Italy November 22, 2022. REUTERS\/Remo Casilli\/File photo<\/p>\n
[1\/2]Matteo Salvini, Italian infrastructure minister and deputy PM, attends a news conference for the government’s first budget in Rome, Italy November 22, 2022. REUTERS\/Remo Casilli\/File photo<\/p>\n
The government wants to use the proceeds to help those struggling with the cost of living, such as mortgage holders.<\/p>\n
WINDFALL FOR THE TREASURY<\/p>\n
Citi analysts calculated the tax could wipe up to 12% off Italian banks’ 2023 earnings. Bank of America estimated proceeds of between 2-3 billion euros for the government.<\/p>\n
Sources said the Treasury expected to collect less than 3 billion euros ($3.3 billion) from the measure.<\/p>\n
That would be similar to the 2.8 billion euros raised by this year’s windfall tax on energy companies.<\/p>\n
Italy will apply the tax only in 2023, with banks paying the sums by June 30, 2024. The measure applies to the net interest margin (NIM), a measure of income deriving from the gap between lending and deposit rates.<\/p>\n
Italy will tax 40% of the NIM earned in 2022 or 2023 – depending on which sum is bigger – targeting the yearly increase above thresholds set at no less than 5% for 2022 and 10% for 2023. Under an early draft, the thresholds were 3% and 6%.<\/p>\n
Intesa at the end of last month said it expected to pocket more than 13.5 billion euros this year from its NIM alone.<\/p>\n
All main Italian lenders reported much stronger than expected results for the first six months and upgraded their profit outlook thanks to higher rates.<\/p>\n
Unlike peers in some other European countries, Italian banks never charged for deposits when official rates fell below zero.<\/p>\n
Since rates rose, they have cut current account costs but have refused to reward cash held there saying that money is for day-by-day use and not an investment.<\/p>\n
($1 = 0.9112 euros)<\/p>\n
Additional reporting by Federico Maccioni and Danilo Masoni; Editing by Keith Weir, Susan Fenton and Mark Potter<\/p>\n
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