The collection of the new government tax on banks for the “extraordinary profits” derived from the invasion of Ukraine and the increases in interest rates will be equivalent this year to 5% of the profits of the entities, according to the governor of the Bank of Spain, Pablo Hernández de Cos, in a conference organized by the Iese.
“It would foreseeably be equivalent in 2023 to an amount equal to 5% of the consolidated net result,” said Hernádez de Cos, with the precision that this calculation has been made based on the joint profits of 2022. The large Spanish banks obtained profits of about 20,000 million euros last year.
The Bank of Spain calculates that the dividends distributed last year by banks amounted to 7.2 billion euros and were equivalent to 40% of profits, which is “a level similar to that observed before the pandemic.” Also noteworthy is the increase in the earnings per share ratio and the “significant” increase in own share repurchase plans by some banks, which serves as additional remuneration for shareholders.
In their first quarter results presentations, Spanish banks have reported an impact of 1.12 billion euros for the year as a whole related to the new tax. They have already made the first payment for half the amount.
The entity that has included in its quarterly results a greater amount for the tax is CaixaBank, with 373 million euros. They are followed by BBVA, with 225 million, and Santander, with 224 million. Sabadell has taken a charge of 157 million, Bankinter of 77 million and Unicaja of 64 million.
De Cos, who has advanced that the ECB is “ever closer to the end of monetary normalization”, has highlighted the slowness with which rate hikes are being transferred to some areas of the economy, including the remuneration of deposits .
“The increase in the twelve-month Euribor has only been transferred marginally to the cost of deposits, well below that observed in previous cycles of tightening of monetary policy,” he indicated. The high liquidity of the banks and the starting point of the deposits, which were at zero levels, “help explain this phenomenon.”
It has also sent a message of prudence to banks, especially after what happened with Credit Suisse and Silicon Valley Bank. “It is necessary for our entities to carry out a prudent provision and capital planning policy,” she warned.
The banks, he added, should allocate “part of the observed short-term increase in profits to increase their resilience”, which “would make it possible to face in a better situation the possible losses that could occur in the event that the worst scenarios materialize.” risky”.
