European banking shares tentatively rebound as Italy softens stance

Reuters

Published Aug 09, 2023 08:38

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."