ROME (Reuters) – The Italian government has capped its surprise tax on bank profits, which rebounded in the stock market on Wednesday.
The Italian Ministry of Economy clarified at the end of the day on Tuesday that the exceptional tax of 40% on profits made by banks would not represent more than 0.1% of their total assets.
UBS analysts calculate the cap meant the tax would have an overall impact of €1.9 billion, compared to an initial impact estimated by sources in Rome and analyst calculations at less than €3 billion. .
Shares of Italian banks Intesa Sanpaolo, Banco BPM, UniCredit and FinecoBank rebounded on Wednesday and advanced between 2.7% and 6.3% at 1:20 p.m. GMT.
UBS said the expected earnings erosion for Italian retail banks is expected to be between 6% for UniCredit and 15-16% for Banco BPM.
Despite market jitters, government officials backed the measure on Wednesday, accusing banks of pocketing too much of the profits from the interest rate hikes.
(Report Alvise Armellini, Francesca Piscioneri, writing Valentina Za, Keith Weir, French version Corentin Chapron, edited by Kate Entringer)
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