Bank shares fall on reports of budget tax increase

Summarised from 2 outlets · Updated 16 Oct, 12:32 · Archive

UK bank shares have fallen after reports the government will raise the tax surcharge on bank profits in the budget on 28 October.

UK bank shares fell on Friday after reports that the government will increase taxes on lenders in the budget on 28 October. Lloyds Banking Group led losses, falling 1.8 per cent, while NatWest dropped 1.51 per cent. Barclays initially fell but recovered to rise 0.13 per cent, and HSBC and Standard Chartered added 1.2 per cent and 0.71 per cent respectively.

Finance Minister John Healey is expected to raise the bank profit surcharge to 8 per cent, up from 3 per cent. The surcharge sits on top of corporation tax and was cut to 3 per cent in 2023 under the Conservative government. KBW analysts said the hike could raise £2 billion per year for the UK Treasury but could reduce lenders' earnings by 6 per cent.

Aviva CEO Amanda Blanc urged the government to support the financial services sector. She told CNBC that financial services is one of the UK's 'core industries' and that the government should not make it difficult for people to invest in British financial businesses. Healey had previously described banks as the 'jewel' in the UK's economic crown.

Bank shares fall on reports of budget tax increase — Image: Sky News

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How it is being reported

Banking tax raid fears hit London lenders' shares ahead of crucial budgetShares in some U.K. banks fell Friday after reports that the government is considering a higher surcharge on bank profits in the Oct. 28 Budget.CNBC · 16 Oct, 12:19
Bank shares fall as tax on lenders expected in budgetMajor UK banks have seen their share prices fall after reports the chancellor is set to raise tax on lenders in the budget.Sky News · 16 Oct, 08:08

In this story: UK · John Healey · Lloyds Banking Group · NatWest · Barclays · HSBC · Standard Chartered · Amanda Blanc

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