CaixaBank, BBVA and Santander will pay 24% more thanks to the new tax

The new bank tax, approved yesterday by Congress, will increase collections compared to the previous formula by increasing additional fees for the three institutions with the most business in Spain, namely CaixaBank, BBVA and Santander.

The three banks will collectively pay out $1.423 million from the accounts this year, 24% more than the previous formula would qualify them for, according to a BNP Paribas report.

CaixaBank will move from paying 513 million to 617 million, Santander from 306 million to 439 million, and BBVA to 367 million instead of 325 million under the previous plan. The tax will be applied for the first time from 2024 accounts and will be in effect for three years.

On the other hand, the other three listed banks, namely Sabadell, Bankinter and Unicaja, will have their score reduced due to their smaller size. Sabadell will grow from 203 million to 173 million, Bankinter from 115 million to 80 million, and Unicaja from 85 million to 44 million.

Taxation by sections up to 7%, which will remain at 5%.

Unlike the previous tax, which taxed 4.8% of income, the new one uses a sectional mechanism similar to the personal income tax mechanism. For the first 750 million the equivalent of 1% of income will be paid; from 750 to 1500 million – 3.5%; from 1500 to 3000 million 4.8%; from 1500 to 3000 million – 4.8%, from 5000 million – 7%.

This means that the three large banks, which are the only ones with gross interest margins in Spain exceeding $5 billion, are not paying 7%, but rather a percentage that would actually be around 5%. The reduction occurs because the amount on which it is calculated is reduced by an amount equivalent to 25% of corporation tax.

BNP took all of these variables into account when making its calculations and concluded that, collectively, the six listed banks would pay $1.720 million. In terms of earnings per share, CaixaBank, Santander and BBVA will fall by 0.5-1.9%, while Sabadell, Bankinter and Unicaja will rise by 1.9-8%.

“We estimate that the new tax will generate an additional €200 million across the banks we serve, although the impact will not be uniform across them,” the report states.