Big four banks make £13.8bn in first quarter of year as TUC renews calls for increase in bank windfall tax

The TUC has today (Wednesday) renewed its calls for the bank surcharge tax to be increased as the four major banks report billions in profit.

According to the latest data, the big four banks – Barclays, HSBC, Lloyds and Natwest – have made £13.8 billion in the first quarter of 2026 alone, despite HSBC profits taking an unexpected hit because of fraud-related charges. 

This comes after the big four banks made profits of £45.7bn in 2025.

The TUC says that an increase in the bank surcharge could raise significant funds over the coming years – particularly given the scale of banks’ current windfalls.

The union body also warns that if – as inflation goes up – the Bank holds interest rates at a higher level than previously expected, banks will be set to make even more money. 

This was reflected by HSBC when reporting their profits yesterday, as the bank explicitly said it is expecting to benefit from higher interest rates this year.

The union body says that “now it’s more vital than ever” that banks play their part in any efforts to protect the economy after Donald Trump’s illegal war has unleashed economic chaos. 

Time for action

Currently the bank surcharge is an additional 3% corporation tax on the profits of banking companies above £100 million, which was reduced from 8% in April 2023 by the Conservatives.

Bank profits have been turbocharged by the removal of the bank surcharge just as high interest rates meant excess profits for banks.

This has led to higher returns both from net interest (the difference on interest charged to borrowers and paid to savers) and interest paid to banks on reserves they hold at the Bank of England.

As a result, bank profits are now much higher than they were in the period before the financial crisis – but after the pandemic, the Conservatives slashed taxes on banks.

TUC analysis reveals an increase in the bank surcharge could raise between £9bn-60bn over the next four years:

Recent TUC polling shows significant support for a windfall tax on banks, with two in three (66%) backing this approach. This rises to 83% among Conservative to Labour switchers in the 2024 general election and 73% among Labour voters from the 2024 election now leaning to Reform.

TUC General Secretary Paul Nowak said: 

“Getting banks to pay more tax on their profits is plain common sense when they’re raking in billions and the rest of the country is struggling to get by.

“After the Tories cut the bank surcharge tax, banks enjoyed a profits bonanza because of high interest rates. 

“Now they could be set to make even more if interest rates remain high for longer.

“With Donald Trump’s illegal war abroad unleashing economic chaos at home, it’s only right that banks' bumper profits are taxed fairly and used to shield households and firms from the damaging impacts of the war.

“The last economic shock caused by Putin's illegal invasion in Ukraine led to a bumper pay day for banks at the expense of mortgage payers – we can’t allow the same thing to happen again.”