Barclays Boss Warns Chancellor Against Hiking Taxes on Banks Amid Economic Growth Concerns

Strategic Insights -

Barclays' Group chief executive CS Venkatakrishnan, also known as Venkat, has joined Lloyds Banking Group's Charlie Nunn in cautioning Chancellor Rachel Reeves against increasing taxes on banks in her autumn budget. The move comes as the Chancellor faces pressure to bolster the public finances following higher-than-expected Government borrowing and U-turns on some spending cuts. Despite the bank's own success, with half-year profits jumping by nearly a quarter to £5.2 billion, Venkat emphasized the importance of growth, stating that banks are already "among the biggest tax payers in this country" and a key sector driving economic activity.

Key Takeaways:

  • Barclays' Group CEO Venkatakrishnan warned Chancellor Rachel Reeves against hiking taxes on banks, citing the importance of growth for the UK economy.
  • The move comes after Lloyds Banking Group's Charlie Nunn expressed similar concerns, stating that raising taxes on banks would be at odds with the Government's pro-growth aims.
  • Barclays reported a 23% rise in pre-tax profits to £5.2 billion for the six months to June 30, driven by investment banking revenues and the Takeover of Tesco Bank.
  • The bank has cut around £350 million of costs out of the £500 million in savings planned for 2025, and plans to return another £1 billion to investors via share buybacks.
  • Barclays' success comes amidst speculation that Chancellor Reeves may look to raise taxes, with the banking sector rumoured to be among those potentially in the firing line.

Statistics:

  • Pre-tax profits rose by 23% to £5.2 billion for the six months to June 30.
  • Credit impairment charges increased by £244 million to £1.1 billion, with a further £469 million booked in the second quarter.
  • Income in Barclays' investment banking business lifted 10% to £3.3 billion in the second quarter.
  • Share buybacks of £1 billion planned to return to investors.
  • £500 million in savings planned for 2025, with £350 million already achieved.

Sources:

  • City A.M. - "Barclays boss warns Chancellor against hiking taxes on banks"
  • The Telegraph - "Barclays profits soar as it scraps £500m of costs"
  • PA News Wire - "Barclays profits increase but boss warns on tax hike"