Barclays profits jump ahead of looming bank tax; French bond yields hit fresh 24-year high – business live
Barclays reported a 12% rise in third-quarter profits to £2.3bn, bringing its year-to-date profits to £8.4bn, as the UK government prepares to announce new bank taxes in next week's budget.
The UK lender's strong performance comes amid growing pressure on banks to contribute more to public finances. Barclays announced a new £500m share buyback, bringing the amount returned to shareholders this year to £2.8bn, up 46% year on year.
In the UK, loans grew 7% year on year with particular strength in its corporate business, up 14%. However, the investment bank reported income of £3.1bn, lower than analysts had forecast, with fixed income trading sliding 19%.
I am pleased with the ongoing momentum of Barclays' operational and financial performance. With one quarter to go before the end of our original three-year plan, we have either achieved or are on track to achieve all of our 2026 group targets.
Bank tax demands
The Trades Union Congress (TUC) has called on the government to increase bank taxes to fund a social energy tariff that could reduce bills by up to £559 annually for low and middle-income households.
The current bank surcharge is an additional 3% corporation tax on banking profits above £100m, down from 8% in 2023. The TUC argues reversing this cut would raise £9bn over four years, while increasing it further could generate up to £60bn.
Barclays' bumper profits aren't an anomaly. All the big banks are doing exceptionally well at the same time – but their windfall profits have been underpinned by mortgage misery for millions. That's why it's time for banks to pay a fairer share.
Market pressures
Financial markets are reacting to various pressures, with French government borrowing costs hitting multi-decade highs. The yield on France's 10-year bonds rose to 5.039%, the highest since July 2002, while the risk premium over German bonds widened to 163 basis points.
Oil prices climbed above $111 per barrel following Houthi attacks in Saudi Arabia, raising concerns about Middle East escalation and supply disruptions. Asian stock markets declined, with Japan's Nikkei down 2.65% and South Korea's Kospi tumbling 3.7%.
Market analysts predict that a UK bank tax, now considered a base case, would most heavily impact Lloyds and NatWest, which have significant UK exposure. Barclays is partly exposed, while HSBC would be least affected.
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