Fifteen record months for Italian banks. The final figures are not yet available, but the projection is for around 12 billion euros for the entire financial sector for 2022 and for the first three months of 2023, according to data from the research company Refinitiv. Half only for credit institutions in the first quarter of the current year. The interest rate hikes introduced by the European Central Bank (ECB), 375 basis points from July 2022 to today, have boosted the profitability of credit institutions. But it has not always translated into an advantage for the end customers. And the chorus of those asking for a contribution from bankers to limit the impact on current accounts is increasing, charges for which on average increased by 7% on an annual basis in April alone.
Rates up, profits ditto, but no drop in costs. In 2022, the top five Italian banks recorded a 66% increase in net profit compared to the previous year. However, this has not always translated into savings for consumers. The Bank of Italy, in the latest survey a few weeks ago, informed that the average management costs of a current account in 2021 were 95 euros, 3.8 euros more than the previous year, and for the 2023 a further increase is expected. At the same time, however, the average gross interest rate on current accounts was 0.17 per cent.
New tax on the world of credit, Patuelli: “The extra profits of the banks do not exist, the government does not affect our shareholders”
Francesco Spini
Eurozone public company profit margins, measured by net income as a percentage of revenues, averaged 8.5% in the full year 2023 through March, a step behind its recent peak, according to Refinitiv. by 8.7% in mid-February. Before the pandemic, at the end of 2019, the average margin was 7.2%. In the case of banks, the profit margin rises to 12% for the euro area average. All without taxes. An example was given by the Iberian credit institutions. Spain’s six largest listed banks, namely CaixaBank, Banco Santander, BBVA, Banco Sabadell, Bankinter and Unicaja, have paid in €1.12 billion under the new tax introduced by the government to redistribute wealth to households and businesses affected by the effects of the war in Ukraine. They earned 5.696 billion euros during the last business year, almost 14% more than in 2021. An increase which, according to Refinitiv, would have been 36% without the new tax.
The ECB has repeatedly remarked that there should be no imbalances. But the impression of the operators, on average, is that there has not yet been a clear transfer of the effects of the new normal in Frankfurt on end customers. According to Morgan Stanley, this impact should materialize by the end of the summer.