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European banking shares tentatively rebound as Italy softens stance

Published 09/08/2023, 08:38
Updated 09/08/2023, 08:40
© Reuters. FILE PHOTO: The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, July 28, 2023. REUTERS/Staff/File Photo

LONDON (Reuters) - European banking shares rebounded on Wednesday following a sharp fall the day before, after the Italian government softened its stance on a tax targeting the profits of its lenders.

Late on Tuesday, Rome said it would set a cap of 0.1% of total bank assets for the new tax, after the surprise announcement sent banking stocks reeling earlier in the day.

"Our European bank analysts estimate that such a cap would reduce the overall size of the tax by over 40%, though it would still take more than 10% from 2023 profits," Deutsche Bank (ETR:DBKGn) analysts said.

"So this adjustment should improve sentiment today."

By 0718 GMT, Europe's STOXX 600 banking index was up 1.1% after a 2.7% fall the day before.

Italy's FinecoBank Banca Fineco was up 3.7%, UniCredit (LON:0RLS) was up 2.3% and Intesa Sanpaolo (BIT:ISP) up 1.9%.

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