Barclays CEO Cautions Against Increased Bank Taxes
The head of Barclays issued a cautionary note to the Prime Minister regarding potential bank tax increases, a notable message from an influential figure in London’s financial sector.
CS Venkatakrishnan, often called Venkat, emphasized that Barclays is already among the largest taxpayers in the UK. He argued that focusing on growth is crucial for the country, suggesting that raising business taxes could hinder that growth.
Recently, Barclays surpassed Lloyds and Natwest to become the UK’s largest bank.
There’s talk that the impressive earnings could make the banking sector a target for tax increases. This comes as the Prime Minister prepares for the upcoming Fall Budget, seeking to address fiscal challenges stemming from recent government policy shifts affecting welfare and winter fuel payments, amidst a struggling economy.
Leaders from Lloyds and Natwest have echoed concerns about increasing the industry’s tax load. However, Venkat’s input is particularly noteworthy; he previously defended the Prime Minister after her tax plan angered the business community by raising national insurance contributions.
In the first half of the year, Barclays reported a 23% increase in pre-tax profits, reaching £5.2 billion, which exceeded analysts’ expectations of £4.96 billion, largely due to strong performance in investment banking.
During this period, market volatility was high, influenced by unpredictable developments in international trade under President Trump. This volatility contributed to a 21% increase in Barclays’ global market revenue, bringing it to approximately £5 billion.
Venkat is implementing a three-year turnaround strategy to shift the bank’s focus, expanding operations in retail, business, and private banking. He’s aiming to deploy an additional £30 billion in risk-weighted assets by the end of next year, having secured around £17 billion of that target, partly through acquiring a significant portion of Tesco’s banking operations last year.
Despite these gains, Barclays’ UK high street business reported a profit of £1.6 billion for the first half, which fell short of market expectations.
A Jefferies analyst commented on the company’s results as Barclays’ shares closed at 371¼p, down 10p (2.8%).
Additionally, Venkat has opportunities to expedite Barclays’ UK expansion, potentially through the acquisition of TSB. However, Santander recently outbid Barclays with a £2.65 billion offer for TSB.
Venkat noted that any acquisitions must meet specific criteria, including being priced appropriately and fitting within certain market parameters.
Among his further goals for 2026 is a substantial rise in cash revenue for investors. On Tuesday, Barclays announced it would return £1.4 billion to shareholders in the first half, a 21% increase from the previous year, primarily through £1 billion in share buybacks and interim dividends of 3p per share.
