CaixaBank considers the tax unfair, distorting and counterproductive

The CEO of CaixaBank, Gonzalo Gortázar, was especially critical yesterday of the new tax announced on banks.

Thomas Osborne
Thomas Osborne
29 July 2022 Friday 23:51
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CaixaBank considers the tax unfair, distorting and counterproductive

The CEO of CaixaBank, Gonzalo Gortázar, was especially critical yesterday of the new tax announced on banks. In a telematic press conference from the group's headquarters in Valencia, the banker described the measure as "unfair, distorting and counterproductive".

He said it after reporting half-year profits of 1,573 million euros. It is 62.4% less than last year when the bank recorded the accounting results derived from the absorption of Bankia. If this accounting effect is excluded and compared in homogeneous terms, the bank's profit grew by 17.1% in the period.

Gortázar revealed that the first estimates they have made on how much CaixaBank will have to pay this year for the new tax amount to 400 or 450 million euros. That means that the entity will assume about a third of the expected global collection.

The manager considered the measure unfair because “it has been proposed on the basis that the entities have high extraordinary results” and – in his opinion – they are low, an average of 5.37%.

The distorting effect of the rule – in Gortázar's opinion – is that only the largest entities pay it. By affecting only the large ones, very local entities and especially international ones can be left out, he reflected. The vulture funds are not going to have to pay the fee either, he said, while wondering if “Are we going to let them be more competitive? It doesn't seem reasonable to me." He also considered distorting the fact that it goes against "European regulations" that asks to pass on all the costs to the client. The Spanish rule wants to expressly prohibit the transfer of the tax to the client.

Regarding the counterproductive effect, Gortázar pointed out that credit will be more expensive and recalled that "when there is a crisis and a strong financial sector, the crisis is less serious."

In a statement, the bank reported that the improvement in profits is due to the "strong increase in commercial activity and the synergies of the integration" with Bankia. The interest margin – which is where the new 4.8% banking tax is expected to apply – was 3,275 million, 3.6% less. In this sense, Gortázar declared that "the interest margin is not the cause of the improvement in results" as evidenced by the aforementioned decrease. The banker added that the lower margin was compensated "with our activity".

CaixaBank highlighted that "the growth in results is also supported by the 5.6% decrease in recurring expenses due to the synergies of the merger and the 16.8% reduction in loan-loss provisions". The CEO stressed in a statement that "we have completed a very positive first half, combining the final phase of the integration process with Bankia with strong growth in our commercial activity".

In the last year the number of employees has been reduced by 4,740 people, to 45,022 workers. The offices have been cut in the period by 774, thus maintaining a total of 4,543.

The manager was convinced that the economy is going to deteriorate in the coming quarters, but stressed that the bank has provisions of 1,257 million to face the consequences of the pandemic, inflation or the Russian invasion of Ukraine. "This fund allows us to be very calm to face the economic scenario", said the CEO. Gortázar highlighted that the growth data of 1.1% in the second quarter has been a positive surprise. Before knowing yesterday's data, CaixaBank's estimate for this year is that inflation ends at 4.2% this year and slows down to 2.4% in 2023.