Bank tax: what does it mean for profits in 2023?

He emergency tax on the banking sector That certainly didn’t stop Spain’s big banks from achieving some of the best (and most anticipated) results in their history.

The invoice concluded between Santander Group, CaixaBank, BBVA, Bankinter, Banco Sabadell and Unicaja Banco provided for payment The €1,000 million appears to be diluted by the 2023 annual profit..

But it is not distributed proportionally among the six subjects.

CaixaBank paid 373 million euros of the 1 billion taxes collected from banking activities in 2022. BBVA and Santander – 225 million each. Sabadell, about 157 million euros. Bankinter 77 million and Unicaja almost 64 million euros.

Tax tax solely and exclusively on income derived from interest margins and net commissions

which banks receive from their activities in local business in Spain. This implies that some objects will be affected more than others because of the weight that commercial activities in Spain have on their accounts, as in the case of Sabadell or Unicaja.

Regarding the total profit, The tax accounts for 11% of Sabadell’s annual results and almost 24% of Unicaja’s profits.. For Bankinter and CaixaBank (the organization that paid the most tax) this percentage ranges from 7% to 10%.

However, in the reports of Santander and BBVA it is only 2%.

Local banking businesses hit the hardest

As you would expect, the impact on local business performance is similar for both the largest and smallest businesses.

The most affected entities will continue to be Unicaja and Sabadell, whose accounts represent 24% and 14.36% respectively of all activities carried out in Spain.. It is followed by Bankinter with 11.34%. Then Santander with 9.45%. And CaixaBank and BBVA are close to 8%.

This year, the score will be even higher than in 2022, in proportion to the result of 2023.

CaixaBank estimates that again it will be the bank that will pay the most tax (€500 million). Grupo Santander will have to pay $338.5 million. BBVA estimates its bill will be about $285 million this year. Sabadell, 190 million. Bankinter – from 90 to 100 million euros. Unicaja Banco has not yet released its estimates for the period.

However, Banking results in 2024 are not expected to be so extraordinary as in 2023. This means that the overall impact of tax payments in the first quarter will be greater.

It also deserves special mention that The tax, which until now has been temporary, may become a permanent tax rate.. This would raise Spain’s tax contribution ratio by 10 percentage points, already 10 points higher than in Germany, the Netherlands or Italy.

“Including bank tax, another 10 percentage points are added. So in Spain with all taxes – corporations, IBI, VAT, social security… – we are already at 63%,” explains Roberta Posa, partner in charge. on corporate taxation at PwC.

“The tax effect is huge, it’s a much higher tax compared to other countries. 20 points more than the Germans, Dutch and Italians, and 10 points more than the French,” he adds.

Renta 4 analyst Nuria Alvarez believes that by removing the larger interest margin, the damage it will do to next year’s earnings report will be greater.

“If it turns out that they are paying taxes on income that is not enough even for balanced operation, this poses a risk to the struggling enterprises and to the industry,” he warned in an interview with the publication Business Insider Spain Luis Martin, partner at Abencys.