Spain banks rally after Supreme Court decision
Adds share movements.
Shares in Spanish lenders rose Wednesday after the country’s Supreme Court said that customers, and not banks, would have to pay a mortgage-related tax, potentially saving the financial institutions from billions of euros in compensation.
A previous ruling from October determined that banks had to pay the tax, representing a change to previous legal doctrine. Until then, banks’ clients had paid.
Late Tuesday, in a 15-to-13 vote, the court finally decided customers should continue paying.
At 0900 GMT, Banco de Sabadell SA (SAB.MC), Bankia SA (BKIA.MC) and CaixaBank SA (CABK.MC) shares rose close to 4%, with Banco Santander (SAN.MC) and Banco Bilbao Vizcaya Argentaria SA (BBVA.MC) trailing closely behind.
Bank shares had fallen sharply following the October ruling, as the lenders would have potentially faced significant compensation payments were the decision to become retroactive.
Spain’s Budget Minister Maria Jesus Montero said the estimated cost of the ruling, assuming four years of retroactivity, could have amounted to 5 billion euros ($5.7 billion). Regional authorities would have had to pay clients, and then claim the money from banks.
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