Italy’s second-largest bank UniCredit said it would reserve 1.1 billion euros as “retained earnings.” Thus, the bank wants to avoid paying 400 million euros in one-time tax on excess income. The bank called this decision a “rational choice.”
The Italian authorities considered that the country’s banks were making too high profits against the backdrop of an increase in interest rates by the European Central Bank. And thus they unfairly make money off of citizens. In August, a windfall tax was introduced with a rate of 40%, and as an alternative, it was proposed to set aside an amount 2.5 times higher than the one-time tax into a reserve. Other credit organizations may follow UniCredit’s example.