Italian Bank Stocks Rally as Government Softens Windfall Tax

Italian bank stocks rebounded after the government diluted a surprise windfall tax on excess profits, which had initially caused shares to plummet. The finance ministry announced a cap on the levy, significantly reducing its negative impact on banks' earnings. Analysts estimated that the tax could have dealt a 19% blow to Italian lenders' net profits for the year. The market reacted positively to the news, with shares of BPER Banca, Banco BPM, Intesa Sanpaolo, Finecobank, and UniCredit all recovering. Concerns about shareholder remuneration also eased, as most banks confirmed their distribution policies.