Shares in NatWest and HSBC declined on Monday morning as investors processed fresh speculation regarding a potential tax increase targeting Britain's major banking institutions.
NatWest plummeted by as much as 1.3 per cent to 506p at market opening, whilst HSBC dropped 0.6 per cent to 1,022p, as reported by .
Barclays decreased nearly 0.2 per cent to 381p.
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Lloyds remained largely unchanged in early trading sessions.
During the weekend, the Liberal Democrats entered the lobbying campaign to impose a new levy on the nation's banking giants.
Daisy Cooper, the party's Treasury spokesperson, advocated for an annual £7bn tax collection from the lenders, referencing recent profit data from the country's largest banking institutions.
Last month, the FTSE 100's leading banks shed over £8bn in market capitalisation during a single trading session as speculation intensified regarding a new levy.
NatWest spearheaded the blue-chip index's decliners with a five per cent tumble, erasing nearly £2.5bn from its market capitalisation.
Bank tax 'most likely' tax raid
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Britain's Big Four banks recorded £50.3bn in profit in 2024, representing an all-time record, and City analysts anticipate lenders could exceed this figure in 2025.
Cooper stated that a windfall tax would enable homeowners and small enterprises to "do the right thing" and invest in solar panels, heat pumps and insulation.
Earlier this month, Ruth Gregory, deputy chief 海角视频 economist at Capital Economics, suggested banks would "bear the brunt of higher taxes" in the forthcoming Autumn Budget. Gregory has indicated that an increase in the bank surcharge and a levy on firms' profits from quantitative easing are the two most probable tax hikes in November's budget.
The Liberal Democrats have joined forces with left-wing think tank the Institute for Public Policy and Research and monetary reform group Positive Money, calling for new taxes on banks.
Despite these calls, the industry has responded with significant backlash.
Earlier this year, the heads of Britain's largest banks warned that additional taxation could hinder the Chancellor's primary goal of economic growth.
Paul Thwaite of Natwest cautioned that "strong economies need strong banks", arguing that he would prefer to utilise the bank's capital for loans to stimulate growth "for the good of the country".
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Barclays' chief executive, CS Venkatkrishnan, contended that banks were "already among the biggest tax payers in this country".
海角视频 Finance, the banking industry body, has advocated for a more favourable tax environment, highlighting that the rate in London significantly exceeds those of international competitors.
A joint report from 海角视频 Finance and PwC discovered that for every £1 of taxes imposed on banks' profits through corporation tax, an additional £1.59 is collected via the banking surcharge, levy, social security payments and irrecoverable VAT.