Very busy, and confusing, summer days for Italian banking. Hours after the surprising 40% tax on extraordinary profits launched by the Government, last Tuesday the Executive of Giorgia Meloni watered down the measure after the stock market storm unleashed by the announcement, showing a certain lack of definition. At the moment, the rate cannot exceed 0.1% of the entities’ assets and “will not have a significant impact” on those that are remunerating savers’ deposits.
Between the clarification and the step back, it will have a lower scope than calculated at the beginning, going from around 5,000 million – the highest estimates – to 2,500, according to the Equita investment bank. It could end up in much less if only the assets in Italy are taken. Given the low impact, the stock markets turned and the banks in unison closed with gains, which in any case are not enough to cover the previous indentation. FinecoBank led the increases in Milan (7.1%), followed by BPM (5.5%), Unicredit (4.4%) and with Intesa Sanpaolo a little behind (2.3%).
The measure was born in disorder, in a game of forces within the governing coalition. It was announced on Monday by the Minister of Infrastructure, Matteo Salvini, in a press conference that followed the last Council of Ministers of the year. Salvini was emboldened. He talked about social justice and unfair benefits, clashing with banking. Neither the Economy Minister, Giancarlo Giorgetti, reluctant, nor Meloni were present at that appearance. Bloomberg indicates that everything was agreed between Meloni and Salvini on Sunday in a hasty manner. At a dinner with their partners, between steaks and wine, they went ahead with a measure to satisfy the populist wing, full of holes that have been covered over time. “There seems to be some confusion as to whether this cap would apply to banks’ total assets, Italian assets or even their risk-weighted assets. We need clarity…”, criticized Karim Cellier, from LMR. With the ambiguity, there has been no lack of criticism of the Government for communication errors and the image given.
The entities have not yet spoken. Until yesterday afternoon, Meloni did not say anything about the tax. Between the rise in the cost of living and mortgages, “it is essential that the banking system behaves in the most correct way possible”, he assured in a video on his networks. The money raised will be used to support mortgage payments and fuel tax cuts. In addition to 0.1% of the assets, it cannot exceed 25% of the net worth. The tax is triggered if the interest margin recorded in 2022 exceeds the value of 2021 by at least 5%, a percentage that will rise to 10% by 2023. Whatever exceeds these references will pay the tax Meloni speaks of “extra unfair difference” above these figures.
