Italy's two major banks report record profits in 2023

ROME -- Italy's two major banks have reported record profits in 2023, signaling the recovery of the country's banking sector from recent difficulties.

On Tuesday, Banca Intesa Sanpaolo -- Italy's largest bank by total assets -- reported a net profit of 7.7 billion euros ($ 8.3 billion) for 2023, a year-on-year increase of 76.4 percent. A day earlier, Unicredit revealed a record net profit of 8.6 billion euros for last year, 51 percent higher than in 2022. Both exceeded market expectations.

The two banks rank among the world's 50 largest banks, according to Standard & Poor's ratings.

Over the past three years, Italy's banking sector faced multiple challenges due to the financial impacts of the COVID-19 pandemic and the energy crisis stemming from the Ukraine crisis.

Additionally, four months ago, the Italian parliament passed a one-time tax of 40 percent on excess profits for banks. The measure was expected to raise around 1.8 billion euros for the Italian Treasury.

The tax sent bank stocks reeling in October, but Banca Intesa Sanpaolo and Unicredit, alongside most other major Italian banks, navigated around the one-time levy by putting excess profits into special reserve funds, thus preserving the record-setting level of profit for the full year.