Intesa Sanpaolo SpA estimates that Italy’s tax on banks’ windfall profits will have an impact of less than €1 billion ($1.1 billion) on the firm, based on changes already approved by the government.
(Bloomberg) — Intesa Sanpaolo SpA estimates that Italy’s tax on banks’ windfall profits will have an impact of less than €1 billion ($1.1 billion) on the firm, based on changes already approved by the government.
“I don’t think the windfall tax will be dramatic for the Italian banking industry,” which is doing well thanks to a resilient economy, Chairman Gian Maria Gros-Pietro said in an interview with Bloomberg Television at the Ambrosetti Forum in Cernobbio, Italy.
Intesa is among lenders that have raised their outlook on the back of the European Central Bank’s rapid policy tightening, only to be blindsided by Italy’s decision last month to impose a tax on banks’ windfall profits. The Milan-based lender said in July that it expects profit “well above” €7 billion this year and guided for further increases over the next two years.
“If we have a lower profit, we will have lower dividends” given Intesa’s policy to pay out 70% of profit, said Gros Pietro. Still, he said, the “dividend will be good in any case.”
Led by Chief Executive Officer Carlo Messina, Intesa has long lured investors with one of the most generous dividend policies among European banks. Higher income from lending, a recovery in commissions as well as lower costs should bolster earnings over the coming years, Intesa said when it raised its targets in late July.
The company is focusing on digital transformation to help cut costs and increase margins, while expanding relatively stable activities such as insurance, private banking and wealth management. Intesa is also seeking to increase its share in foreign markets where it’s already present, by boosting investment banking and global markets activities.
–With assistance from Flavia Rotondi and Antonio Vanuzzo.
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