Towards a new record of excess profits for banks and refineries

Both Greek banks and the country's refineries are heading for new «sky-high» profits this year, with the government refusing to tax these excess profits in order to take measures against the price of oil. This fact makes it imperative that SYRIZA-P.S. recently tabled a proposal to tax these extraordinary profits at a rate of 90%.

In particular, the four systemic banks are expected to move close to a new record of excess profits this year, reaping huge benefits due to the increased interest rates on loans while keeping their deposit rates frozen. The result is that borrowers are being burdened, while the government refuses to tax these «sky-high» profits, contrary to the SYRIZA-P.S. proposal on accuracy, which includes taxation at 90% in order to have measures to curb accuracy and help citizens who have to face heavy burdens.

According to the results announced by the four systemic banks (National Bank, Piraeus Bank, Eurobank and Alpha Bank), their net profit stood at EUR 1.05 billion in the first quarter of 2024, recording an increase of 33.5% compared to the same period last year. Their managements even did not rule out the possibility of an upward revision! It should be recalled that in the 2022-2023 biennium the credit institutions have recorded cumulative profits of EUR 7.546 billion, while the net interest income of the systemic banks amounts to EUR 13.5 billion!

Burdens

«The »pillar" for the second year in a row will be net interest income, which is a major burden for citizens. As the results of the first quarter show, net interest income amounted to EUR 2.12 billion, up by 15.6% year-on-year, which reflects in the most emblematic way the policy of Greek banks. At the same time, commissions charged to consumers and professionals are also a source of income for banks. Net fee and commission income amounted to EUR 477 million, recording an increase on both a quarterly and annual basis of 6.5% and 26% respectively.

Soared and this year the profits of EL.PE.

At the same time, particularly high profitability continues this year in refining, as demonstrated by the first quarter 2024 financial results of Helleniq Energy (formerly EL.PE.), foreshadowing excess profits not only in the current year, but for a total of three years, of which only a small part (of the record 2022 figures) was committed as a «solidarity contribution», despite the continued accuracy that kneecaps family budgets.

According to the results announced, the company reported (on an IFRS basis) an increase (compared to the same quarter last year): by 25% EBITDA (350 mn), by 33% operating result (268 mn) and by 16% net profit (179 mn). The company's first-quarter figures are particularly high, even surpassing the half-year results of past years, especially given the negative impact at group level of the reduced returns in the electricity and gas sectors (stakes in Elpedison and DEPA Emporia). A significant impact on profitability is of course due to the high refining margins, which reflect precisely the source of the so-called «sky-high» profits, i.e. the situation on the international market.

The government does not even mention the application of a «special solidarity levy», which was applied only for 2022 with a minimum tax rate of 33%, while there is a provision in the relevant EU regulation for its extension to 2023. The parliamentary opposition put the issue on the table about two weeks ago, submitting a comprehensive proposal to tackle the issue, which included, among other things, the extraordinary taxation of the excess profits of banks and refineries at a rate of 90%, which seems necessary.

Why is it necessary to implement the proposal of SYRIZA-P.S.

It is recalled that the proposal of SYRIZA-P.S. concerns the introduction of an extraordinary levy of 90% for the excess profits of banks in 2023, which result from the difference between the interest rates of deposits and loans of Greek banks compared to the average of EU banks.

It also refers to the imposition of a profit margin cap and the extension of the temporary solidarity contribution to oil refining for the year 2023 as follows:

* Establishment of a maximum gross profit margin in oil refining and the production of refined products at the level of the average of the corresponding proven profit margins in the EU.

* Extension of the temporary solidarity contribution for the year 2023.

* Introduction of a special levy on the excess profits of refineries in 2023 amounting to 90%.