Swedbank and SEB refused to comment. ($1 = 0.9267 euros) (Reporting by Andrius Sytas in Vilnius; Additional reporting by Simon Johnson in Stockholm; Editing by Terje Solsvik, Bernadette Baum and Mark Porter)
(Updates with comment)
By Andrius Sytas
VILNIUS, Feb 6 (Reuters) - Lithuania may introduce a
windfall tax on banks if profits continue to soar this year on
the back of rising interest rates, the country's central bank
governor and finance minister said on Monday, with proceeds
likely to go toward defence spending.
"This is a critical situation. We are in an environment of
high rates, so unexpected profits are appearing," central bank
Governor Gediminas Simkus told a news conference.
"If this continues in 2023, it is appropriate to look for a
way to redistribute the unexpected profit through fiscal
decisions," he said.
Banks in Lithuania could earn profits of 1 billion euros
($1.08 billion) in 2023, more than three times the level of
recent years, Finance Minister Gintare Skaiste said, adding that
extra proceeds to the government should be spent on defence.
"The war in Ukraine and countries' reactions to it led to
the high liquidity and high rates. The invasion also leads to
more defence spending, so if we tax the windfall, the income
would be used for defence", Skaiste told reporters.
The decision on whether to tax the banks would be made in
next few months, she said.
The neighbour of Russia had so far budgeted 2023 defence
spending at 1.8 billion euros ($1.9 billion), or 2.52% of its
gross domestic product.
Two Swedish-owned groups hold over 50% of Lithuania's
banking assets: Swedbank , whose 2022 profits
increased by 64% to 148 million euros, and SEB , whose
profits were up 49% to 172 million euros.
British fintech firm Revolut owns the third-largest bank,
with about one-fifth of total assets, serving the European Union
and European Economic Area, with Lithuanian residents accounting
for less than 2% of the customer base.
The Lithuanian Banking Association said it is too early to
forecast 2023 banks earnings.
"In the current situation, we can see that various
geopolitical and macroeconomic factors can affect specific areas
of the economy in different ways", it said in a statement,
without directly addressing the windfall tax proposal.
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