A possible victory of the Popular Party in the next elections to be held on July 23 could be potentially positive for bank shareholders, who would see how the amount of the dividends they would receive would improve. Analysts hold the thesis that the popular could withdraw the extraordinary tax on banks (approved to offset the unequal impact of inflation). A decision that, if fulfilled, would increase the final benefit of the banks, especially if one takes into account that the current Prime Minister, Pedro Sánchez, left the doors open at the end of last year for it to become permanent.
The thesis defended by the market is that the power of the popular could mean the elimination of the tax on this tax on the banking sector, which accounted for 4.8% of income in Spain, and which had the objective of raising 3,000 million euros throughout the two years of application. At the moment the entities have already gone through the box and have paid almost 1,500 million euros, of which around 1,200 million corresponded to the large listed banks, with Caixabank in the lead, which paid 377 million euros.
The fact that the banking entities did not have to face the tax would allow the pressure on the benefit to be removed, the experts pointed out. It should not be forgotten that some entities such as Banco Santander have seen the result for the first three months of the year frozen (recording an improvement of barely 1%), while other banks such as Sabadell saw it cut by 4% with compared to the same period in 2022. For its part, Unicaja Banco was the most affected by the tax, as its net profit fell by 43.3%. On the other hand, BBVA, Caixabank and Bank inter managed to offset the tax on their benefit with higher income.
By extension, restoring pressure on profits would allow the distribution of higher dividends, although as analysts point out, it does not imply a change in its ‘pay out’ policy, the percentage of profit that is destined to remunerate shareholders. This would remain around 50%, which already represents the recovery of pre-pandemic levels. But there are higher dividends because the amount to be distributed would be higher.
The abolition of the tax would also reinforce the profitability of the bank at a time when, despite the fact that the sector has favorable winds for the future, there is more uncertainty. In that, the analysts recall that the payment of the tax has subtracted between one and two points of profitability, a figure that they consider high.
The PP would close the door to extend the tax
However, other analysts in the sector considered that the tax, since it was already appealed by the entities, would be more difficult to eliminate de facto, but they did bet that, in the event that the courts agreed with the financial entities, a PP government would accept the judicial decision without appealing it. They also see it as feasible that with a popular Executive this tax would not become permanent as the current Government has proposed, since they remember that the PP already voted against the tax when it was approved in Congress.
What the Popular Party does contemplate as an alternative to the bank tax is the approval of a fund to help the mortgaged. This was revealed by the president of the Party, Alberto Núñez Feijoo, who considers that he has the support of the sector. This fund, which could reach 2,000 million euros, would be endowed in equal parts by both the Government and the entities themselves, although it is true that the Popular Party will recognize that it still needs to be outlined.