Banks Profits

Britain's four biggest banks are set to report combined annual profits of about £33 billion this year thanks to rising interest rates as speculation mounts that Jeremy Hunt will raise taxes on the industry to repair the public finances. Third-quarter results next week from HSBC, Lloyds Banking Group, NatWest and Barclays are expected to show they are on course for a strong year. Based on analysts' predictions, the scale of their profits could bolster the case for Hunt, the new chancellor, to hit the industry with higher taxes. Without it being lowered, the combined rate on banks will rise to 33 per cent.

Rishi Sunak had planned for the surcharge to fall to 3 per cent as corporation tax rose, meaning an overall 28 per cent rate. City analysts expect Lloyds to unveil third-quarter pre-tax profits of £1.8 billion and its annual profits to amount to £7.2 billion. NatWest is forecast to have earned £1.3 billion in the three months to September 30 and £5 billion for the year. Barclays, which also has a big business in the United States, is estimated to have made pre-tax profits of £1.8 billion in the quarter, rising to £6.9 billion for the 12 months to the end of December.

HSBC makes most of its money in Asia and is expected to generate annual profits of $16.1 billion this year. Last year bank profits were boosted after they released provisions during the Covid pandemic in 2020. In 2019, the four banks made combined pre-tax profits of about £25 billion.

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