NatWest boss Paul Thwaite has urged the UK government not to raise taxes on banks in next month’s autumn budget, after the lender reported a 30% rise in quarterly profits.
Thwaite said he recognised the difficult choices facing Chancellor Rachel Reeves as she tries to close a £30bn hole in public finances, but warned that higher bank taxes could damage investor confidence and undermine economic growth.
“The government should be thoughtful about signals it sends to investors who are looking at the UK as a long-term home for capital,” he told the media on Friday.
NatWest reported pre-tax profits of £2.18bn for the three months to the end of September, up from £1.67bn a year earlier. The former state-backed bank also upgraded its outlook, saying it now expects 2025 income to reach £16.3bn. Shares rose nearly 3% after the announcement.
Thwaite argued that strong domestic banks were essential for the economy and said NatWest was committed to using its capital to support households and businesses: “Strong economies need strong banks. The best way to use our capital is to support customers.”
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His comments come as ministers consider new revenue sources ahead of the 26 November budget, including possible tax increases affecting banks, landlords and property owners.
Banking shares fell in August amid speculation the government could introduce a sector-wide levy to reclaim windfalls linked to post-2008 quantitative easing, a move previously backed by the Institute for Public Policy Research.
Thwaite’s warning mirrors recent remarks by Lloyds boss Charlie Nunn, who said higher bank taxes would run counter to Labour’s pledge to boost growth.
Financial services are one of eight key sectors identified in Labour’s industrial strategy, and industry groups argue that heavier taxation would make London less competitive against rival financial hubs.
Thwaite said he welcomed the government’s pro-growth signals so far: “Those messages have resonated well with investors. They have supported confidence in the sector.”
