Concern over Italy’s budget plan is spreading from the country’s largest banks to smaller institutions. The measures are expected to raise €5 billion from the banking sector through a higher Ires rate and reduced deductions, but smaller lenders say the proposed exemption is too narrowly targeted.
Under the version certified by the State General Accounting Office, the three-point Ires increase would not apply to banks with a taxable base below €6.7 million. The provision allows a deduction of up to €200,000, limited to the difference between the tax due after the increase and the amount that would have been payable without it.
The government presented the measure as a way to protect banks closely connected to local communities and particularly active in lending to households and small and medium-sized businesses. However, executives and other sources at smaller banks argue that the threshold would benefit only the very smallest institutions.
The cooperative banking sector includes both single-branch lenders in less densely populated areas and larger institutions with extensive branch networks. Many Banche di Credito Cooperativo appear to exceed the threshold. The two holding companies overseeing the cooperative banking groups, Iccrea and Cassa Centrale, are now large banks and would be fully affected by the increases.
Other small lenders, including savings banks and popular banks, could also be affected, although some may qualify for the exemption. Examples cited in the report include Banca Valsabbina, which recorded gross profit of €74 million, and Popolare del Frusinate, with just under €30 million.
Banks are also assessing the impact of reduced deductions for Irap purposes, another measure expected to increase the overall cost of the budget law. Institutions in the affected category are calculating the consequences and hoping that Parliament will make further changes during the legislative process.
Sources: ANSA Economia.