Proposes to extend the solidarity contribution to the banks: last year they earned almost a billion in profit | Business

“The changes in monetary policy that began in 2022 became the reason for the rapidly growing EURIBOR interest rates and the increase in income received by credit institutions from interest on loans. This was especially evident in countries where variable loan interest rates prevail, J. Pinskus reminded. – In Lithuania, more than 90 percent loans to residents and businesses are granted at a variable interest rate.

As a result, as EURIBOR rises, the interest rate of the portfolio of loans held by Lithuanian credit institutions grows by the same amount, which in 2022 in December it reached 4.27 percent, in 2023 rose to 6.83 percent in December, and in 2024 in March it was 6.84 percent.

In addition, the main interest rates, which the European Central Bank began to significantly increase in 2022, have not yet been reduced, and credit institutions receive an atypical amount of interest-generated income for a large excess of liquid funds, so in 2023 banks in Lithuania (after solidarity contribution and other taxes) earned 986 million EUR profit or twice as much as in 2022, when it reached 491 million. euros.”

Despite the increased profits of the banks, the current Lithuanian government is speaking more and more loudly that the solidarity tax will have to be waived, as this is provided for by the current legal acts.

“However, by talking like this, the Government “forgets” that laws can be changed, which is what we are trying to do, that is why we have prepared a project to amend the law on the temporary solidarity contribution of the Republic of Lithuania, – clarified the politician. – We submitted a proposal to the Seimas to extend the application of the temporary solidarity contribution to 2025 for all banks established and operating in Lithuania, branches of banks licensed in other European Union member states and branches of foreign banks, and financial groups of central credit unions.

If the extension of the Temporary Solidarity Contribution is approved, it will allow the funds received to finance important national defense projects, which are necessary for the immediate assurance of Lithuania’s national security, without seeking other financing methods or increasing taxes for ordinary residents of the country.”