UniCredit CEO discusses Italy’s windfall tax

In a candid interview published on Thursday, UniCredit’s Chief Executive Officer, Andrea Orcel, addressed Italy’s recent imposition of a windfall tax on banks. The move, which has reverberated throughout the European financial sector, sparked concerns among shareholders and investors alike. Mr. Orcel, speaking to Il Messaggero daily, emphasised the importance of not eroding the confidence of these stakeholders in the wake of the tax announcement.

In his measured response, CEO Andrea Orcel articulated the need for patience and restraint, saying, “I believe it is right to await the outcome of parliamentary discussions on the windfall tax.” This statement reflects the gravity of the issue at hand and UniCredit’s commitment to engaging constructively with the evolving legislative landscape.

Italy’s decision to levy a one-off 40% tax on profits derived from increased interest rates stunned the banking sector, leading to a seismic ripple effect across Europe. The Italian government’s rationale behind this measure was to censure banks for their perceived failure to adequately reward depositors. While the tax is intended as a one-time measure targeting gains from banks’ elevated interest rates, it is noteworthy that it will not exceed 0.1% of their total assets. Furthermore, it remains subject to potential amendments as it progresses through the labyrinth of parliamentary ratification.

Mr. Orcel did not confine his remarks solely to the tax issue; he also took the opportunity to reiterate UniCredit’s financial commitments. The bank stands firm in its buyback and dividend guidance, pledging to disburse a minimum of 6.5 billion euros ($6.97 billion) to shareholders this year. These financial actions, if executed as promised, will culminate in total returns to investors amounting to no less than 15.5 billion euros over the period spanning from 2021 to 2023.

UniCredit’s CEO, Andrea Orcel, thus presents a steadfast face in the midst of financial turbulence, advocating for a cautious approach while reaffirming the bank’s unwavering commitment to its stakeholders and its financial promises. As the Italian windfall tax on banks navigates the intricate channels of parliamentary review, it remains to be seen how the financial landscape will evolve and how UniCredit and its peers will adapt to these unprecedented challenges.

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