Spanish bank stocks fall after government announces plans for temporary tax

Spanish banks fell sharply on Tuesday after the Spanish government reportedly announced a temporary tax on financial institutions and power companies to help individuals cope with high inflation and power bills. Shares of Bano de Sabadell
SAB,
-7.44%
and CaixaBank
CABK,
-8.63%
each fell over 8%, while BBVA
BBVA,
-5.13%
BBVA,
-3.77%
and Banco Santander
SAN,
-3.65%
SAN,
-5.81%

lost more than 5% each. In his state of the nation address to parliament, Prime Minister Pedro Sanchez said the government would raise 7 billion euros ($7.02 billion) for 2023-2024 by tax on extraordinary profits for the two sectors for the next two years, Reuters reported. He said €2 billion each year would be raised from power companies and €1.5 billion each year from banks. Spain has one of the highest inflation rates in the eurozone bloc, as Russia’s war in Ukraine has driven up costs of commodities around the world, but especially in Europe.