Swedbank Estonia CEO says Lithuania's bank taxes spooked investors' and foreign banks’ interest

By bne IntelliNews October 28, 2024

Olavi Lepp, CEO of Swedbank’s Estonian branch, stated that Lithuania’s recently imposed temporary bank solidarity levy has dampened interest among new banks and foreign investors in the country, BNS, a Baltic newswire, and ERR.ee, the website of Estonia’s national broadcaster ERR, reported on October 25.

Speaking to ERR on October 23, Lepp remarked that the windfall profit tax has proven ineffective in both Latvia and Lithuania.

"The impact on foreign investor interest is already evident in Latvia and Lithuania…Lithuania has actively sought to attract a new bank to its market, but no one is going there anymore. That market may face significant challenges under these conditions," Lepp said, BNS and ERR.ee reported.

Lithuania introduced a windfall tax on banks’ net interest income for 2023 and 2024, which parliament extended for an additional year in June, allocating proceeds toward military and dual-use infrastructure projects. Next year, Lithuania will also raise the corporate income tax for banks by one percentage point to 21%, making a previously temporary 20% rate permanent.

Lepp also highlighted Swedbank Estonia’s strong performance, reporting a net profit of €279mn for the first nine months of the year and noting that the bank’s profit per customer in Estonia exceeds that in Sweden, Latvia, or Lithuania, BNS and ERR.ee said.

#Swedbank #Estonia #banking #taxes

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