Barclays PLC and Royal Bank of Scotland Group PLC may pay the most among European banks to satisfy President Obama's proposed tax on banks, two analysts said.
Barclays and RBS may face annual costs of $967 million and $621.9 million, respectively, Jaap Meijer, an analyst at Evolution Securities Ltd., wrote in a research note Friday. Credit Suisse Group AG may pay $557 million, and HSBC Holdings PLC, $484 million, Evolution said.
"The impact can be particularly large for the investment banks" but limited for retail banks with "strong" U.S. deposits, he wrote.
Obama would use the levy on as many as 50 financial companies to recover the costs of the bailout of U.S. banks. The tax on liabilities, to be imposed starting June 30, could generate $90 billion over 10 years.
"The terms of the Obama tax are clearly quite punitive," Simon Willis, an analyst at NCB Stockbrokers Ltd., wrote in an e-mailed note to investors Friday. Among U.K. banks, Barclays and RBS are likely to be "hit proportionately the most," with the tax reducing annual profits by 5%.
Analysts were not in agreement on the impact on specific banks.
Deutsche Bank AG would be the most affected among European banks by the levy, losing 9% of its profit to the tax in 2012, Jon Peace, an analyst at Nomura International PLC, wrote in a note to investors Friday.
To help reduce the tax's effect, "banks are likely to compete harder for deposits, depressing the net interest margins of commercial banks," Peace wrote.
Analysts at Morgan Stanley estimated that the levy would cut Deutsche Bank's 2012 earnings by 4%, Barclays' by 3% and HSBC's by 1%. Credit Suisse and UBS AG might see 2% to 3% shaved off earnings, an analyst wrote.