Campaigners have renewed calls for a windfall tax on UK banks that might increase £19bn in the direction of Andy Burnham’s cost of living agenda, after HSBC raked in $10.1bn (£7.5bn) value of profits within the second quarter of the 12 months.
Bosses at HSBC reported on Tuesday that profits rose 60% 12 months on 12 months within the three months to the tip of June, helped by charges from wealth administration and insurance coverage enterprise, as nicely as greater rates of interest, which permit the bank to cost extra for loans and mortgages.
The HSBC chief govt, Georges Elhedery, stated he would contemplate growing banker bonuses on the again of the robust outcomes and deliberate to restart a share buy-back programme that had been on pause since final 12 months.
It brings collective profits for the 4 largest banks – HSBC, NatWest, Barclays and Lloyds – to £29.2bn over the primary six months of the 12 months, placing lenders back in the crosshairs of campaigners, together with Positive Money and the Trades Union Congress, who’re calling for a contemporary tax on the profitable business.
The marketing campaign group Positive Money stated bank bosses had pledged almost half of their profits – a complete of £13.7bn – to shareholders by way of dividends and share buy-backs, proving they might simply shoulder a tax that they calculated may in the end increase £19bn in the direction of the federal government’s spending plans at the October budget.
Positive Money stated the federal government may replicate Spain’s levy, focusing on any UK revenues above £800m with a 38% tax, in keeping with the power profits levy launched for oil and gasoline corporations announced by the Tory government in 2022.
They stated the ensuing £19bn could be sufficient to cowl the cost of Andy Burnham’s VAT reduce from electrical energy payments (value £850m), the £2 cap on bus fares (value £500m) and the enterprise charges reduce for pubs, golf equipment and music venues (value £100m) greater than 13 occasions over.
“Previous governments have allowed the powerful banking lobby to persuade them against taxing these record-breaking profits in recent years, despite overwhelming public support for the policy,” stated the co-director of Positive Money, Sara Hall.
“We’re calling on Andy Burnham to break with his predecessors by resisting the demands of City lobbyists and reclaiming these lost billions with a windfall tax on bank profits, the proceeds of which could be used to fund truly life-changing support for the households and businesses struggling to pay their bills right now.”
Banking bosses have been cautious when requested about their views on a contemporary tax rise. They informed journalists over the previous week that they have been inspired by Burnham’s financial imaginative and prescient, however careworn that their skill to lend cash to companies was essential for the brand new prime minister’s development ambitions. “UK growth requires strong banks,” Elhedery stated.
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But advocates of a tax stay undeterred, and the TUC basic secretary, Paul Nowak, stated: “There is now a mountain of evidence to suggest that banks can easily afford to pay more tax. While higher interest rates have meant mortgage misery and bigger bills for the rest of us, the big banks have been rolling in it.”
Joanne O’Neill, the co-director of advocacy and influencing at ActionAid UK, stated the federal government also needs to take “meaningful action” to maintain UK banks to account for their impression on the local weather and human rights.
“ActionAid research has shown how HSBC funnelled billions into fossil fuels and industrial agriculture companies between 2021 and 2023, helping to fuel environmental destruction. And since then it has watered down its climate commitments, further shirking its responsibility to help bring about the just transition we need,” O’Neill stated, including that banks ought to face a “polluters pay tax” that pretty mirrored their accountability for financing and inflicting local weather hurt.
Metro Bank adopted its massive 4 opponents in reporting bumper profits for the primary half of the 12 months. The challenger bank reported a 38% soar in pre-tax profits on Tuesday morning to £60.7m over the primary six months of 2026, after a soar in company, SME and specialist mortgage lending, as Metro tried to nook “underserved markets” to increase profits.
While the robust rise in profits will add weight to calls for a UK windfall tax, Metro would most likely escape Positive Money’s proposals. The bank reported about £241.5m in underlying internet curiosity revenue for the primary six months of the 12 months, and if repeated, would preserve its full-year determine beneath the campaigner’s £800m threshold.
