SAN - Banco Santander other Spanish bank stocks slide on unforeseen tax

Banco Santander ( NYSE: SAN ) -4.8% , Banco Bilbao Vizcaya Argentaria ( NYSE: BBVA ) -4% and other Spanish bank stocks are falling in Tuesday morning trading after the country imposed new taxes on large banks and power companies to help recoup consumers' purchasing power amid soaring inflation.

The government said the nation's temporary tax is expected to generate 7B euros ($7.02B) in 2023 to 2024, according to Associated Press .

Furthermore, Prime Minister Pedro Sanchez said in a state of the nation speech that now is the time to impose the tax on large depository institutions as they are starting to benefit from rising interest rates.

Sanchez added that he's "fully aware" that consumers are have a tough time keeping up with record inflation and that “more and more, wages don´t go as far, that it´s difficult to make ends meet,” as reported by AP.

The move comes after the government last month announced an emergency economic package worth more than 9B euros, as Russia's war in Ukraine, severe unemployment and elevated energy costs are hindering prospects an economic recovery.

Other Spanish bank ADRs trading in the red include Caixabank SA ( OTCPK:CAIXY ) -7.9% and Banco De Sabadell SA ( OTCPK:BNDSY ) -0.8% .

"The impact on Spanish banks has been immediate because this measure was not expected and it has come as a cold shower," said Renta 4 analyst Nuria Alvarez, as quoted by Reuters .

Related ETF: iShares MSCI Spain Capped ( EWP ) -1.1% .

Previously, (May 31) Euro-Zone inflation hit record high .

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