'Epidemic of profiteering'

Unite reiterates call for windfall tax as big banks post skyrocketing profits on the back of rising interest rates

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Unite has reiterated its call for a windfall tax on big banks as they post yet another year of bonanza profits amid a cost of living crisis that has seen millions of ordinary people suffer.

On Friday (February 17) NatWest announced its highest profits since the global financial crash, recording more than £5bn in profits before tax in its 2022 full-year results. This is an increase from profits last year, which stood at £3.8bn.

NatWest boss Alison Rose saw her pay packet skyrocket by an astonishing 46 per cent to £5.2m last year, up from £3.4m the year before. NatWest likewise increased its bonus pool to £367m, up from £298m the year previous.

CEO Rose raked it in with a bonus of £640,000, which was paid out half in cash and half in shares. Rose’s bonus was the first dedicated bonus paid in cash to a NatWest CEO since before the financial crash in 2007.

Earlier this week, Barclays likewise posted mega-size pre-tax profits of £7bn. Although their profits dipped by 15 per cent – mostly due to being hit by legal and misconduct charges from a US trading error and from having to a put aside money to cover potential defaults from borrowers – profits still remained historically high.

Barclays’ bonus pool remained high and virtually unscathed by the dip in profits, with so-called ‘top performers’ to share a bonus pot of £1.2bn in 2022, down only 3 per cent from the previous year.

Barclays’ twenty highest-earning bankers took home more than £4.4m each, including one banker earning an eye-watering €11m in 2022.

HSBC, Lloyds and Standard Chartered are other banks that are set to post results next week. Predictions show that HSBC is likely set to post pre-tax profits of £14bn, while Lloyds is predicted to post £7bn and Standard Chartered £4bn.

If the predictions are accurate, then the UK’s biggest banks will have raked in nearly £40bn in profits in 2022 alone, far exceeding the £35.7bn they made in profits in 2007, the year before the global financial crash.

The latest results from the big banks mirror research by Unite published in January which showed that banks’ rising profits are being driven primarily by rises in interest rates.

The research showed that post-pandemic, the top banks have made more money than at any point since the financial crash. Since the Bank of England chose to start raising interest rates, the big four’s profits have grown three times more quickly than workers’ incomes and twice as fast as profits for all companies.

Unite has said that the excessive profits in the sector, principally generated by interest rate rises, cannot be allowed to go on and on when millions are in fear of the fuel bill and cannot feed their children properly. 

Commenting on big banks’ latest results, Unite general secretary Sharon Graham said, “It’s offensive that government ministers are insisting NHS workers take another savage pay cut while their big City banker friends are given carte blanche to make billions.

“Rishi Sunak needs to put a real powerful windfall tax on the excess profits of the big banks. Like the energy companies, the greed of the big banks is fuelling the cost-of-living crisis. An epidemic of profiteering has brought this country to its knees – workers are not responsible for it and should not have to pay for it. It is time the government held the big business interests that profit, while everyone else pays the price, to account.”

By Hajera Blagg