Leading banks in the UK saw their share prices hit hard as news of a proposed new bank tax emerged.
NatWest share prices lost more than 4.7% nearing midday in Europe, Lloyds saw a dip of 4.5%, and Barclays lost 3.7%. This dragged down the benchmark stock index in London; the FTSE 100 was down by nearly 0.4% at time of reporting.
“NatWest, Lloyds and Barclays were the FTSE 100’s biggest fallers on Friday morning as investors wondered if the era of bumper profits, dividends and buybacks is now under threat,” Russ Mould, investment director at AJ Bell, said.
The idea for the new tax came in a proposal from think-tank IPPR to the UK government on Friday. They suggest charging commercial banks to compensate for the losses of the Bank of England’s massive government bond buying—‘quantitative easing’ (QE)—programme. This “will cost the taxpayers £22 billion (€25.4bn) a year in every year of this parliament,” said the IPPR in their report.
The so-called quantitative easing is a monetary policy tool which provided a boost to the UK economy and yielded significant profits for a while. However, since December 2021, the Bank of England has increased its interest rate from close to zero to a peak of 5.25% and that took a toll on the programme and led to interest rate losses.
The think tank said in its report that the government could compensate for the loss partially by implementing a ‘QE reserves income levy’ on commercial banks.
It is unclear where the government stands on this issue at the time of writing the article, but analysts say that it could choke growth in the UK.
“The issue is whether taxing the banks more will end up stifling the very growth the government is keen to foster, by crimping lending to businesses and households alike,” said Mould.
However, the public opinion could be supportive, given that “HSBC, Barclays, NatWest and Lloyds are expected to earn some £44 billion (€50.7bn) between them worldwide in 2025, their third-best year ever, after 2023 and 2024,” he adds.
The investment director noted: “These companies have enjoyed a strong run on the stock market in recent years, and they’ve also played an important role in lending money to small and large businesses, which helps to create jobs and support the UK economy.”
A MAJOR high street bank has become the latest British lender to quit the Net Zero Banking Alliance, the bank said on Friday.
Barclays argued that the departure of several global lenders has left it no longer fit to support the bank’s green transition.
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Barclays has become the latest British lender to quit the Net Zero Banking Alliance
Barclays’ decision to quit the foremost banking alliance focused on tackling climate change follows on from HSBC and several major US banks.
It also raises questions about the ability of the group to influence change in the sector going forward.
The bank said in a statement on its website: “After consideration, we have decided to withdraw from the Net Zero Banking Alliance.”
It added that its commitment to be net zero by 2050 remained unchanged and that it still saw a commercial opportunity for itself and its clients in the energy transition.
Earlier this week Barclays published the first update on its sustainability strategy in several years.
It said the bank made £500 million in revenue from sustainable and low-carbon transition finance in 2024.
Jeanne Martin, co-director of corporate engagement at responsible investment NGO ShareAction called the decision to leave the Net Zero Banking Alliance “incredibly disappointing and a step in the wrong direction at a time when the dangers of climate change are rapidly mounting.”
Barclays said the alliance was no longer fit for its purpose: “With the departure of most of the global banks, the organisation no longer has the membership to support our transition.”
The Net Zero Banking Alliance, a global initiative launched by the United Nations Environment Programme Finance Initiative, lists more than 100 members on its website – including leading international financial institutions.
A spokesperson for the alliance said it remains focused on “supporting its members to lead on climate by addressing the barriers preventing their clients from investing in the net-zero transition.”
In February, the rate dropped to 4.87%, followed by another cut in April to 4.61%.
In February, the bank reduced the rate to 4.87%, followed by another cut in April to 4.61%.
Now, just months later, rates are set to drop again, leaving savers questioning whether to stick with the account or explore better options elsewhere.
How Barclay Card Changes Could Affect You
ANALYSIS by Consumer Reporter, James Flanders:
Barclaycard’s change to its credit card repayment structure sounds great if you don’t dig into the details.
After all, Barclaycard says it’s “making the changes to give you greater flexibility each month”.
In practice, it means that if you can’t afford to pay off your balance in full at the end of each statement period, you can repay much less under the minimum repayment option than you have done previously.
If you only pay the minimum amounts on occasion, this is super useful.
But if you rely on this type of repayment plan in the long term, it could will cost you hundreds of pounds extra in interest.
It could also negatively affect your credit file as it’ll take you much longer to clear your debt.
More interest will be applied to your outstanding balance, too, as less is paid down each month.
For example, if you have a balance of £5,000 on a Barclaycard at 24% interest, where you only make the minimum payments and don’t spend on the card.
Under the old “2.5% of the balance plus the interest charged” rule, it would take around 14 years to clear the balance.
In total, you’d expect to pay about £3,500 in interest.
But with the new “1% of the balance plus the interest charged” calculation, it will take over 30 years to clear the same balance.
You’d then end up paying a whopping £8,500 in interest.
Before taking out a new credit card or increasing the amount you borrow, it’s vital to consider the consequences.
You should only borrow money if you can afford to pay it back.
It’s always vital to ask yourself if you actually need to borrow before committing to a new credit card, personal loan or overdraft.
If you use a credit card, I’d recommend that you always pay off your balance in full at the end of each statement period.
Lenders have a responsibility to help customers who are in debt.
If you’re in a debt crisis, your first point of call should be your lender.
They might help you out by offering you a reduced interest rate or a temporary payment holiday – so check in with your lender if you’re struggling.
Pro-Palestine activists rallied outside Wimbledon on the first day of the tennis championships in London to protest tournament sponsorship by Barclays Bank, who they say helps to finance Israel’s war on Gaza. Barclays says it is not a ‘shareholder’ or ‘investor’ in defence companies supplying Israel.
MILLIONS of bank customers face being left stranded after a damning report revealed 6,000 branch closures over the past decade.
A whopping 13million customers used bank branches last year, according to the Financial Conduct Authority (FCA).
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More than 6,000 bank branches have shut over the past decadeCredit: PA
The data shows that most users remain “reliant on bank branches for essential services,” despite the move toward online banking.
The FCA report revealed that an eye-watering 9.7million people visited a specific site at least once a month.
Experts fear that the trend of branch closures will leave customers stranded with around 3.3million account holders never banked online.
Around 63 per cent of those are over the age of 85, which raises further concern, according to the FCA.
The report also found that people from low-income households – as well as those with cancer, multiple sclerosis, or HIV — were less likely to engage with digital banking.
Caroline Abrahams, charity director at Age UK, said: “The disappearance of face-to-face banking risks cutting a significant minority of the older population out of an essential service, making it difficult if not impossible for them to maintain their independence.”
The main reasons people avoided online banking were concerns about security and a preference for speaking to someone face-to-face.
A staggering 21 per cent of account holders surveyed said their regular bank branch had closed.
Consumer group, Which?, showed that more than 6,000 branches have shut in the past decade.
Jenny Ross, money editor at Which? said: “As the UK’s bank branch network continues to be cut to the bone, more people are finding it difficult to access banking services.”
Major high street bank axing key service
Former pensions minister Ros Altmann added: ‘Millions of British citizens cannot and do not use online or mobile banking, and indeed don’t even have a smartphone.
Despite the rising bank closures, Nationwide has committed to keeping all of its branches open until 2028.
The major bank has seen the number of customers rise by 4 per cent, which appears to be partly driven by other bank closures.
Which bank branches are closing in June?
Halifax:
Bitterne: 400/402 Bitterne Road SO18 5RS – June 9
Bournemouth: 335/337 Wimborne Road BH9 2EA – June 4
Felixstowe: 85 Hamilton Road IP11 7BQ – June 2
Fleetwood: 4 Poulton Street FY7 6LR – June 22
Gainsborough: 32 Lord Street DN21 2DQ – June 2
Launceston: 1 Southgate Street PL15 9DP – June 3
Leek: 16 Derby Street ST13 5AB – June 4
Letchworth: 1 Commerce Way SG6 3DN – June 3
Littlehampton: 68 High Street BN17 5EA – June 23
London (North West): 469 Kingsbury Road NW9 9ES – June 2
Bank of Scotland:
Bathgate: 50 Hopetoun Street EH48 4EU – June 30
Cowdenbeath: 349/351 High Street KY4 9QJ – June 24
Linlithgow: Regent Centre Blackness Road EH49 7HU – June 23
Lloyds:
Alcester: Stratford Road B49 5AX – June 25
Ashbourne: Compton DE6 1DY – June 24
Dorchester: 1-2 High West Street DT1 1UG – June 19
Launceston: 13 Broad Street PL15 8AG – June 3
Liverpool: 188-190 Breck Road L5 6PX – June 4
Over the rest of the year, another 40 branches are closing.
Barrow-in-Furness: 133-135 Dalton Road LA14 1HZ – September 10 Bexleyheath: 131 Broadway DA6 7HF – October 23 Blackpool: 283/287 Lytham Road FY4 1DP – October 29 Bolton: 23/27 Knowsley Street BL1 2DG – November 20 Brentwood: 12 High Street CM14 4AE – September 10 Bristol: 15 Kings Chase Shopping Centre BS15 8LP – October 8 Carmarthen: 121/122 Lammas Street SA31 3AE – October 6 Castleford: 68 Carlton Street WF10 1DB – September 8 Cirencester: 10/12 Cricklade Street GL7 1JH – September 25 Crewe: The Market Centre CW1 2HU – October 14 Derby: 39 East Street DE1 2BL – October 23 Epsom: 51-52 The Ashley Centre KT18 5DB – September 15 Erdington: 221 High Street B23 6SS – September 24 Folkestone: 70-72 Sandgate Road CT20 2AA – October 9 Hayes: 45/47 Station Road UB3 4HH – October 6 Hexham: 20 Priestpopple NE46 1XH – November 5 Hove: 86/87 George Street BN3 3YE – October 20 London (South East): 165/169 Eltham High Street SE9 1TT – October 29 London (South East): 9-13 Powis Street SE18 6HZ – October 1 London (South West): 6 St Johns Hill SW11 1RU – September 23
Bank of Scotland:
Edinburgh: 206 St John’s Road EH12 8SH – October 29
Lloyds:
Biggleswade: 35 High Street SG18 0JD – November 5 Blandford: 6 Market Place DT11 7EE – November 10 Bristol: 16 Highridge Road BS13 8HA – November 6 Bury: 45 The Rock BL9 0JP – October 21 Chard: 27 Fore Street TA20 1PS – November 11 Coventry: 531 Foleshill Road CV6 5JN – November 4 Dunstable: 12 High Street North LU6 1JY – November 4 East Grinstead: 1/3 London Road RH19 1AH – November 12 Fakenham: 27 Norwich Street NR21 9AH – July 1 Falmouth: 11-12 Killigrew Street TR11 3RA – November 13 Feltham: 40 The Centre TW13 4AX – November 4 Ferndown: 84 Victoria Road BH22 9JB – November 17 Hexham: Priestpopple NE46 1PA – November 5 Kidderminster: 1 Vicar Street DY10 1DE – October 16 Leeds: 1 Cross Gates Centre LS15 8ET – August 20 Leeds: 52 Town Street LS12 3AE – September 8 Leominster: 9 Corn Square HR6 8LT – November 18 London (East): 180 – 182 High Street E17 7JH – October 22 London (South West): 12 Mitcham Road SW17 9ND – October 8 Loughton: 11 The Broadway IG10 3SW – November 12 Manchester: 64 Old Church Street M40 2JF – November 5
Since June 2022, Lloyds Banking Group has shut 537 bank branches across its three brands.
It has previously said all workers at the affected branches will be offered jobs elsewhere in the company.
UK banks and building societies have closed about 6,293 branches since January 2015, according to research by Which?.
This works out as almost two branches shutting every day for the past decade.
Barclays is the individual bank that has reduced its network the most, with 1,227 branch closures.
What to do if your local bank is set to close
If your nearest branch is closing, you should still be able to access banking services without going to another town.
For example you could check if there is a Post Office near you.
Here you’ll be able to do basic banking tasks, although you won’t be able to open a new bank account or take out personal loans or mortgages.
You can find your nearest Post Office branch by visiting postoffice.co.uk/branch-finder.
Many banks also offer a mobile banking service where they bring a bus to your area that offers services you can usually get at a physical branch.
Other banks use buildings such as village halls or libraries to offer mobile banking services.
You may want to contact your bank to see what mobile services they have available.
Another option is to check if there’s a super ATM near you.
These have been rolled out across the UK where branch closures have left residents unable to access essential banking services.
These ATMs will allow customers to withdraw funds, access their balance, change PIN numbers and deposit cash.
Banking hubs are also being opened across the country with 250 set to be available by the end of 2025.
What services do banking hubs offer?
BANKING hubs offer a range of services to bridge the gap left by the closure of local branches.
Operated by the Post Office, these hubs allow customers to perform routine transactions such as deposits, withdrawals, and balance enquiries.
Each hub features private booths where customers can discuss more complex banking matters with staff from their respective banks.
Staff from different banks are available on a rotational basis, ensuring that customers have access to a wide range of banking services throughout the week.
Additionally, customers can receive advice and support on various financial products and services, including loans, mortgages, and savings accounts.
