Austrian banks Erste Bank and Raiffeisen Bank International hit on European markets by Romania’s tax plan

35

Shares in Austria’s Erste Bank and Raiffeisen Bank International decreased on Wednesday after the Romanian Government has announced plans to tax the banking assets as of 2019.

Erste Bank, which gets 8.4 percent of its revenues from Romania’s biggest bank Banca Comerciala Romana, saw its shares tumble as much as 10 percent, the worst STOXX 600 faller, before recouping some losses, Reuters informs, quoted by ziare.com.

Raiffeisen Bank International, which has 6 percent of its assets in Romania according to an investor presentation in November, was last trading down 3.5 percent.

The proposed tax would also hit the earnings of French bank Societe Generale, KBW analysts said, estimating an impact of between two to seven percent on earnings per share, the same source reads.

As Romania Journal reported, Finance Minister Eugent Teodorovici announced on Tuesday that banks will be differently taxed, according to ROBOR (Romanian Interbank Offer Rate). The higher the index is, the higher taxes will be, says the new tax, called “the tax on greed”.

The FinMin announced this measure among other several fiscal measures envisaged for 2019, such as the EUR 10 billion investment fund, the decrease of taxes in constructions, but also the controversial decision to take the “vice tax”, which encompasses money normally intended for the investments in hospitals and to the big healthcare programmes to counter chronic diseases, and redirect it to the state budget to cover for the state employees’ salaries and for other expenses in the central administration.

He also announced the capping of the gas price for a three-year period: RON 68 megawatt/hour. The measure will apply until February 28, 2022.

In the case of Pension Pillar II: Funds can invest in public-private partnerships; administration fee drops from 2.5% to 1%; the second commission of 0.05% of the assets changes according to the fund’s performance; a person may withdraw the money, but not earlier than 5 years, and the withdrawal fee is 2% of the assets.

 

- Advertisement -

Comments are closed.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More