HSBC has fired a warning shot against higher bank taxes after revealing a surge in profits, arguing that Britain’s economic recovery depends on maintaining strong lenders capable of financing business growth.
The banking giant reported pre-tax profits of $19.5 billion (£14.5 billion) for the first six months of the year, a 23 per cent increase on the same period in 2025 and ahead of analyst expectations.
The results capped a strong earnings season for Britain’s biggest high street banks, with Lloyds, Barclays and NatWest also reporting stronger profits.
The bumper figures have reignited political pressure over whether banks should contribute more to public finances. The Trades Union Congress said combined first-half profits of almost £29 billion from the four major lenders represented evidence that the sector could absorb a larger tax burden.
The union has called for the corporation tax surcharge on banks to rise from 3 per cent to at least 8 per cent, claiming the move could raise £9 billion over four years.
HSBC chief executive Georges Elhedery pushed back against the prospect of further levies, arguing that a profitable banking sector is essential to investment and economic expansion.
“For growth to be able to manifest, you need businesses to be confident and invest,” he said. “For businesses to invest, you need them to have access to financing.”
The bank announced plans for a further $1 billion (£740 million) share buyback, while also highlighting progress on a major cost-cutting drive that has removed $1.5 billion (£1.12 billion) of expenses ahead of schedule.
Profit growth was supported by stronger net interest income and rising fees from wealth management and banking services. However, HSBC also reported higher expected credit losses of $2.4 billion, including a $400 million fraud-related exposure involving a UK lender and provisions linked to geopolitical risks.
Elhedery said the UK economy had remained “outstandingly resilient” despite global shocks, including the Iran conflict and inflation pressures.
The latest results place HSBC at the centre of a growing political battle: whether record banking profits represent a sign of economic strength — or an opportunity for the Treasury to raise billions from one of Britain’s most profitable industries.