European bank profits could be a lure for European governments after they surged in the third quarter as a result of rising interest rates. European governments may be tempted to tax them to fund the business and household support measures they enacted in the midst of the energy crisis, according to a related Financial Times report. While plans of this nature could cause friction between governments and the ECB, the idea seems to be already popular among some eurozone member states.

Spain is the first member of the eurozone to consider taxing bank profits, following the lead of non-eurozone Hungary, which has already introduced the tax. If he chooses to do so, Madrid will be well on his way to clashing with the ECB, but it could be a role model. As it became known in these days, when Britain was in the midst of an economic and political crisis, the new British Chancellor of the Exchequer, Jeremy Hunt, is preparing to maintain the existing tax on business profits. His move is part of a policy of raising taxes and trying to repair any damage caused in his short life by the Liz Truss government. Needless to say, given that Barclays posted a third-quarter profit of £1.97bn, equivalent to around €2.27bn, up 6% year-over-year.

Plans to tax the high profitability of banks could cause friction between governments and the ECB.

At the same time, Germany’s flagship bank Deutsche Bank announced a doubling of its pre-tax profit to 1.6 billion euros, the bank’s highest profit in the same period since 2006 and beating analysts’ forecasts of 1.3 billion euros in profit. At the same time, the eurozone’s largest bank, Santander, reported an 11% jump in profits as it posted a net income of 2.42 billion euros in the third quarter. Notably, the Spanish bank increased its NPL reserves by 24% to 2.76 billion euros as rising inflation and interest rates put pressure on the finances of both businesses and consumers. So far, however, the number of bankruptcies in Spain has declined. In the same vein, UniCredit released its estimate that its earnings will exceed 4.8 billion euros this year, thanks to higher interest rates and higher earnings in the third quarter. In the third quarter, Italy’s second-biggest bank recorded a record €1.71bn profit, clearly beating analysts’ forecasts of a €1bn profit, as NPL losses were much more limited. Similarly, Standard Chartered’s earnings beat expectations in the third quarter as the bank received backing from the governments of Singapore and Hong Kong.

At the same time, discussions, official or unofficial, about the taxation of superprofits of various industries do not stop in various countries. Except, of course, for the taxation that the governments of Greece, Italy, Spain, Hungary, Romania and the UK have already introduced or plan to impose on excess profits from energy companies.