ING CEO estimates “greed tax” in Romania at EUR 11-12 mln

Lender ING Bank Romania will have to pay this year some EUR 11-12 million worth of taxes on its financial assets (or “greed tax”) under the emergency ordinance (OUG) 114/2018, ING Group CEO Ralph Hammers estimated in the conference with investors after the Q1 results release.

“Bank fees have become an important part of our cost base. We expect them to grow further as a result of the introduction of the new tax in Romania,” Hammers said, according to Profit.ro.

The larger banks in Romania also estimated the taxes on assets they would have to pay this year: market leader Banca Transilvania expects about EUR 28 million, BCR expects to pay around EUR 20 million, and BRD Groupe Societe Generale expects to pay about EUR 16 million. The estimates exclude possible incentives for credit growth or the decrease in the loan-deposit interest rate differential.

The tax on financial assets paid by banks with market shares above 1% will be 0.4% while those with a market share below 1% will pay 0.2%. Payment is made half-yearly, with the first payment scheduled by August 25. Banks on loss pay no tax and the tax will not exceed the profit. Furthermore, the “greed tax” may decrease by up to 100% for banks that increase lending over a certain target and / or reduce the interest rate differential margin between credits and deposits.

Last year, ING Romania reported a net profit of RON 685 million (EUR 147 mln), up 39% compared to 2017, marking the best result in the 25-year history of the Dutch bank's branch in Romania. The bank’s earnings rose by 27%, amid 21% year-on-year credit growth at the end of the year, which propelled the bank to a market share of 10.1%.

(Photo source: Shuuterstock)