Bank stocks dive on PiS tax plans

Beata Szydło, the PiS candiate in this autumn’s partliamentary elections, reiterated her party’s stance that if PiS wins the election it will slap a tax on banks operating in Poland.

Banks’ market capitalisation, the measure of their value on the stock exchange, fell PLN 6.5 billion on Tuesday, with the WIG-Banki down 3.3 percent, falling to a level last seen in September 2013.

Since PiS candidate, Andrzej Duda, won the first round of the presidential election in May, the WIG-Banki index has fallen 17.5 percent.

Business daily Puls Biznesu estimates that banks could lose from 25 percent to 40 percent of their profits, with the 12 largest banks noting net profits of PLN 4 billion rather than an expected PLN 12.3 billion in 2015, if the PiS plans are executed.

PiS has said it would also introduce special taxes on retail chains. Around two-thirds of banks and most of the large retail networks are foreign-owned.

Piotr Glinski, who is in charge of drafting PiS's policy programme ahead of the election, said recently that the party proposes special taxes on banks and retail chains similar to those in Hungary. The party would also limit the transfer of profits out of Poland by foreign companies.

The banking sector is under pressure connected to forex mortgages, with over 500,000 borrowers having to pay higher installments after the cap on the Swiss franc was removed in January. PiS has suggested it will push lenders to convert loans at historic rates, potentially inflicting huge losses on the banks.

PiS says it would use the funds raised from the taxes to increase the income tax threshold to PLN 6,500 from the current PLN 3,091.

Some foreign banks are looking to exit. Raiffeisen Bank International is trying to sell its local unit Polbank, and so is US giant GE Capital, with state-controlled insurer PZU emerging as the leading contender to buy both. (jh)