英国预算或上调银行附加税至8%，但属已发酵传闻且银行股月跌逾8%、利空已大部分定价

UK banks have stepped up lobbying attempts against the prospect of higher taxes, warning of the hit to growth and lending, but many investors have already priced in the risk.

If Chancellor of the Exchequer John Healeyraises the bank surcharge to 8%, where it was prior to 2023, that would restrict net profit for Barclays Plc by 2% to 3%, according to Goldman Sachs Group Inc. analysts. For Lloyds Banking Group Plc and NatWest Group Plc, that would be 6% to 7%. The levy was cut to offset the effect of rising corporation tax, meaning any increase now will result in a higher overall tax burden than under the previous rates.

Banks are likely to be a core target in Healey’s first budget on Oct. 28, as he looks to raise the 3% bank surcharge already levied on top of the standard 25% corporation tax rate, Bloomberg has reported. The Labour chancellor has also ruled out increasing the UK’s tax on capital gains, limiting his other options to reduce the country’s deficit. And the big British lenders will be able to absorb any such hike, according to analysts and investors interviewed by Bloomberg News.

“They’re making high teens returns on equity,” said UK banking analyst Ed Firth at Keefe Bruyette & Woods. “They’re returning huge amounts of capital to shareholders in dividends and in share buybacks. They can certainly afford to pay the bank tax.”

Banks with larger portions of revenue earned in the UK would be harder hit. Barclays, for example, would likely be less impacted, “because a lot of its income is earned overseas in its US cards business and in its investment banking business,” said John Cronin, an analyst at SeaPoint Insights.

Investors have already started to react to the possibility of a tax rise. The FTSE 350 Banks Price Return Index, which tracks banks traded on the London Stock Exchange, dropped more than 8% in the month through Oct. 20, during which reports emerged on Healey’s plans for the bank surcharge.

“Investors are fussed but I don’t think they are massively concerned that it will drive a coach and horses through profitability, and it’s difficult to determine what’s already priced in,” Shore Capital analyst Gary Greenwood said.

The four biggest UK banks are set to report third-quarter earnings over the next week, with Barclays first up on Thursday. With interest rates staying higher for longer than previously expected due to global inflation concerns, the banks have likely improved their lending margins.

The question is whether banks let shareholders absorb the pain from an increase, or look to offset the impact by repricing loans and deposits and cutting costs, Citigroup Inc. analyst Andrew Coombs wrote in a client note on Wednesday.

Analysts are expecting Barclays to report £2.4 billion ($3.2 billion) of pretax income during the quarter, down from £3.2 billion in the prior period, but up 17% from a year ago, according to average estimates compiled by Bloomberg.

NatWest is anticipated to report £2.2 billion of pretax income, up about 1% from a year ago. Lloyds’ adjusted pretax profit is expected to come in at £2.3 billion, up more than 80% from a year ago when the bank took provisions over motor finance compensation.

“While a modest increase in the surcharge could be a headwind to profits and sentiment, we would argue that it would not fundamentally alter the equity story or overall profitability trajectory,” Goldman Sachs analysts wrote in a note on Oct. 15.

Bank executives have previously urged the UK government not to raise taxes, arguing such a move would stifle competition and growth in the wider economy. Barclays Chief Executive Officer CS Venkatakrishnan said in September that lending and investing would be a better use of bank capital, and executives have met with Healey to discuss the impact of any tax increase.

“An increase in bank taxes at the budget would weaken the UK’s competitiveness, discourage investment and job creation, and work against the government’s ambition to deliver growth in every postcode,” a spokesperson for lobby group UK Finance said in an emailed statement.

What remains unclear is whether any new levies would extend to the UK operations of foreign banks.

Tiina Lee, Citi’s UK CEO, said Tuesday that any increase to bank taxes would be “disappointing news,” but that her firm is committed to staying in the UK. JPMorgan Chase & Co. boss Jamie Dimon has gone further, warning earlier this year that an “uncompetitive tax system” would drive capital away from the country.

Read More: Citi Committed to UK Even If Bank Surcharge Raised, UK CEO Says

Healey faces difficult decisions in the budget, particularly in light of the UK’s national debt exceeding £3 trillion in the first half of the fiscal year. That pushed the deficit to £97.8 billion. On Wednesday, Healey said he would maintain “our fiscal discipline and drive for growth in every postcode, while giving businesses and families some breathing space.”

“I think we need to remember that the Treasury is running the country,” KBW’s Firth said. “The bank tax is one small part of that. I suspect that that will be one aspect of the budget but not the biggest part.”