HSBC Profits Soar Amid Calls for Increased Bank Taxation
Bank reports 32% profit increase as unions and campaigners urge Chancellor to raise bank surcharge.
Callum Smith
HSBC reported a pre-tax profit of 9.6 billion US dollars for the three months to September.
Paul Nowak stated unequivocally that banks can afford to contribute more. He cited HSBC's results and Barclays' recent bumper profits. Households and businesses need more support, he added, and the Chancellor must make banks pay a fairer share.
The Trade Union Congress (TUC) demands the government raise the bank surcharge to 16 percent. This would deliver £24 billion over four years. A 35% bank surcharge, they further claim, would yield £60 billion over four years.
Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities.
Conversely, the New Economics Foundation claims restoring the bank surcharge to 8% would raise just £1.8 billion a year from banks. Reversing cuts to the bank surcharge is understood to raise upwards of £2 billion a year.
The Chancellor is expected to increase the surcharge on bank profits from 3 percent to 8 percent, despite pleas from the industry. UK Finance has warned that a fresh tax raid would make the UK even more of an international outlier.
Georges Elhedery, HSBC, stated, "Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities." He added, "It also reflects consistent execution of our strategic priorities with pace, precision and discipline."
HSBC claims it has made larger savings than initially planned. They expect cost savings to reach two billion dollars (£1.5 billion) by the end of the year. Pam Kaur, HSBC, confirmed the bank is creating greater capacity to invest, grow, and deliver strong returns for shareholders.
The bank prepares to cut jobs in its UK wealth management business as part of efforts to ramp up the use of AI. Pam Kaur clarified that AI is there to help humans, not necessarily to replace them. She stated, "And that’s so important for us because, in our judgment, what’s most important for an AI strategy to work is to keep the human accountability, judgment and decision-making very much at the core of what we do."
She acknowledged that AI will change how work is done across industries, impacting some roles, transforming others, and creating entirely new ones. Pam Kaur also confirmed that HSBC remains domiciled in the UK, stating, "We are domiciled in the UK and we remain in the UK so that question is just not on the table."
Sara Hall urged the Chancellor to claw back some of these lost billions with a windfall tax on bank profits this week.