Britain’s biggest banks are set to report combined quarterly profits of more than £10 billion as calls grow for the sector to face a windfall tax in the coming Budget.
The results would leave the top four lenders on course to pocket annual profits adding up to more than £45 billion for 2025.
Barclays, Lloyds and NatWest will report results for the third quarter over the next few days, with HSBC releasing figures the following week.
The lenders insist that a raid on bank profits to help fill Britain’s £30 billion financial black hole would damage the economy.
And they are likely to reiterate that message as they deliver their latest financial figures – their last set of results before the Budget on November 26.
But the scale of their profits, which have been boosted by higher interest rates over recent years, is likely to hand ammunition to those who say the banks should pay more.
City slickers: Britain’s biggest banks are set to report combined quarterly profits of more than £10 billion as calls grow for the sector to face a windfall tax in the coming Budget
Gary Greenwood, a banking analyst at independent investment group Shore Capital, predicts third quarter profits of £5.7 billion for HSBC, £2.1 billion for Barclays, £1.8 billion for NatWest and £1 billion for Lloyds.
That would represent a total of £10.6 billion, a slight fall on last year’s haul of £12 billion.
But for the year as a whole he predicts £45.5 billion profits, up from just over £44 billion in 2024.
Persistent speculation suggests the Chancellor is considering a tax raid on banks. Earlier this month, it was reported that Rachel Reeves was eyeing a rise in the banking surcharge – a levy added to companies’ corporation tax bills – from 3 per cent to 8 per cent – to raise £2 billion. Recently, the Institute for Public Policy Research, a left-leaning think-tank, called for a separate windfall tax on lenders to raise up to £8 billion a year.
Greenwood said that to avoid higher taxes the banks would need to show they are using their bumper profits to offer good deals to customers and value to shareholders through dividend payments and share buybacks.
Cashing in: Shares in the big four banks have soared in the past year
The Trades Union Congress has been among those calling for the lenders to pay more.
TUC general secretary Paul Nowak told The Mail on Sunday: ‘Banks have made eyewatering profits on the back of high interest rates.
‘At the same time after 14 years of falling living standards under the Tories, working people’s budgets remain hard-pressed and our public services are in desperate need of investment.
‘That’s why it’s time for banks to pay a little bit more to investing in our hospitals, schools and local services. We can still have a profitable and productive bank sector, while asking them to pay their fair share.’
Speculation over tax increases comes despite a concerted lobbying campaign by lenders, who say the move would damage growth, arguing that higher taxes would threaten their capacity to lend to households and growing businesses.
Trade body UK Finance published data last week showing British banks already pay higher taxes than those in other financial centres such as New York and Frankfurt, contributing £43 billion in the latest financial year.
And it warned that fears of a tax raid on the sector were sending a ‘negative signal to international investors’.
Britain’s motor finance mis-selling scandal will also cast a shadow over the results, particularly for Lloyds, after the announcement of a compensation scheme by the City watchdog. The lender now says the episode – related to the way commission was paid to car dealers who sold loans – could cost it nearly £2 billion.
It has also criticised the way the Financial Conduct Authority scheme has been set up and is making representations as the FCA consults on it.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
InvestEngine
InvestEngine
Account and trading fee-free ETF investing
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
#British #banks #land #45bn #profit #bonanza
