Italian banks have seen their shares plummet after the Cabinet approved a proposal to apply a temporary tax on some profits this year to help consumers and businesses cope with higher borrowing costs.
Transport Minister Matteo Salvini announced the tax at a Monday evening press conference, saying it was a measure of “social equity” to make up for a series of interest rate hikes from the European Central Bank (ECB).
Those increases are aimed at fighting inflation and making it more expensive for people to get loans to buy homes and cars or for companies to get new equipment or build facilities.
The five major Italian banks reported a combined net profit of about 10.5 billion euros (£9.05 billion) in the first half of the year, up 64 per cent from the same period in 2022, according to credit rating agency DBRS Morningstar. It pointed to higher interest income, resilient fees and cost management.
The 40 per cent tax would be applied to banks’ profits from the difference between the interest they pay customers on deposits and the interest they earn on loans.
Mr Salvini said the tax revenue would amount to “a few billion” euros that would be used to fund tax breaks and help first-time homeowners get mortgages.
The proposal must now be converted into legislation and be approved by Italy’s Parliament, where the right-wing government enjoys a comfortable majority.