Big banks wary of tax raid in budget
- Lloyds is projected to report a drop in profits to about £1.6 billion, down from £1.86 billion a year ago.
- Barclays and NatWest are expected to post improved earnings, with Barclays anticipating profits of nearly £2 billion.
- The banking sector remains concerned about potential tax increases in the upcoming budget, which could influence their financial health.
In the United Kingdom, major banks are anticipating a report of strong profitability in the third quarter, despite ongoing speculation that the government may increase taxes on the banking sector in the upcoming budget announcement. Lloyds Banking Group, Barclays, and NatWest are set to disclose their earnings, with analysts predicting a decline in profits for Lloyds due to a previous boom in borrowing costs that has since subsided. On the other hand, Barclays and NatWest are expected to report better-than-anticipated earnings, with Barclays likely showing an increase to nearly £2 billion. The potential tax hikes proposed by Rachel Reeves are causing concern among these financial institutions, indicating a cautious outlook as they prepare for their financial disclosures and the government's fiscal decisions. The banks have managed to maintain resilience in their earnings amidst changing interest rates, which reflects the industry’s ability to adapt despite regulatory pressures.