Britain's finance minister hikes bank tax to 6%, less than lenders feared
XLF•Britain will temporarily raise its bank profits surcharge from 3% to 6% for 15 months, a move estimated to raise £1.5 billion. The announcement was followed by a rally in banking shares.
1. Temporary surcharge increase
Finance minister John Healey said Britain would double the surcharge on bank profits above a set threshold from 3% to 6% for 15 months. The finance ministry estimates the increase will raise £1.5 billion.
2. Industry and market reaction
Banks had lobbied against an increase, arguing it could curb lending. Shares in HSBC, Barclays, Lloyds Banking Group and NatWest climbed after the announcement. Analyst Angeline Ong said the fixed end date was important and investors appeared to view the change as a one-off charge rather than lasting damage to earnings.
