Italy’s bank stocks regained much of the value they lost on Tuesday after clarification from the government. The 40% windfall tax will be capped at 0.1% of an institutes’ assets.
The economy and finance ministry announced today a new 40% windfall tax it was introducing on lenders’ surplus profits would be capped to 0.1% of institutes’ assets.
The Italian banks lost close to €9billion in capitalisation on Tuesday after the government’s surprise announcement of the windfall tax. The bank stocks recouped around €3.91billion on Wednesday.
Fineco was 7.2% up after losing 9.9% on Tuesday, MPS regained 2.7% after a drop of 10.9%. In adadition, Unicredit rose by 4.4% following a 5.9% slide and Intesa Sanpaolo climbed 2.3% after a loss of 8.67%.
The gains helped the Milan bourse’s FTSE Mib index close up 1.31% on 28,308 points after it dropped by 2.12% on Tuesday.
Why the windfall tax announcement?
Italy’s banks registered big profits in the first half of the year, with revenues boosted as a result of the European Central Bank’s interest-rate hikes. Among other things, this has caused payments on variable-rate mortgages to soar.
The windfall tax will be paid in 2024 on the surplus profits of 2023. The government said the money raised would be used to help finance tax cuts for households and businesses.
Italian bank association ABI has not released a statement about the windfall tax.
