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Mamma mia, Meloni! European bank shares tank after Italian tax raid on lenders
by cityam
CHRIS DORRELL
SHARES in European banks fell after the Italian government announced a windfall tax on banks who have seen bumper profits thanks to higher interest rates.
Late on Monday night, Italy’s populist government led by Giorgia Meloni (pictured) agreed to impose a one-off 40 per cent tax on extra-profits, defining extra-profits as when net interest income has grown beyond three per cent for 2022 and beyond six per cent for 2023.
The move, which follows similar policies from governments in Hungary and Spain, sent shares in Italy’s largest banks tumbling.
Shares in banks across Europe fell as investors fretted that the move may be replicated elsewhere.
In France, BNP Paribas fell 3.5 per cent while Societe Generale’s share price fell 2.8 per cent.
Filippo Alloatti, head of financials at investment manager Federated Hermes, commented: “Although measures like windfall taxes are easy to introduce, they can be challenging to retract due to political reasons.”
Shaun Richards, an independent London economist, tweeted “there is nothing so permanent as a temporary tax” in response to the news.
