Citigroup chief executive Jane Fraser says she is \u201cworried\u201d a potential windfall tax on banks under new Prime Minister Andy Burnham could severely damage London\u2019s competitiveness and drive major investment to rival global financial hubs.<\/p>\n
Speaking to The Banker in London this morning, she praised the city as an important centre with sensible regulation and talent, and with an equity culture. \u201cBut money votes with its feet. [Such a tax] makes it an easier decision not to book [business] in London.\u201d<\/p>\n
The CEO says as an alternative to London she would look at France, Germany, Hong Kong or even Japan, citing the substantial backing of the SpaceX IPO by Japanese investors.\u00a0<\/p>\n
Her comments come as lenders fear they could be hit with a bank tax as the new government faces the choice of either introducing levies or cutting spending to support Burnham\u2019s cost-of-living pledges. Burnham took office at the end of July after his predecessor, Sir Keir Starmer, was forced to resign amid declining popularity.<\/p>\n
Campaigners suggest that a windfall tax on banks could raise as much as \u00a319bn for the government. Such a levy would mark an abrupt departure from the previous administration\u2019s friendly relationship with the financial industry, which was seen as key to economic growth.<\/p>\n
Concerned about the possibility of additional levies, JPMorgan CEO Jamie Dimon warned last month that these could jeopardise the lender\u2019s planned \u00a33bn<\/a> London headquarters and deter investment in the country.<\/p>\n Speaking on The Master Investor Podcast with Wilfred Frost, Dimon said any increase in the bank levy or corporation tax surcharge would be \u201cone more negative\u201d when assessing the country\u2019s attractiveness for investment.\u00a0<\/p>\n \u201cIt may sound great, \u2018tax the banks\u2019, but it\u2019s $5bn that my shareholders paid on that extra tax,\u201d he said. \u201cI just think things like that have adverse consequences.\u201d<\/p>\n Last year, Citi confirmed plans to spend $1.5bn to refit its UK headquarters<\/a> in London\u2019s Canary Wharf district.<\/p>\n It disclosed the figure ahead of US President Donald Trump\u2019s state visit to the UK in September, saying the investment underscored the lender\u2019s \u201cdeep and longstanding commitment\u201d to the British economy. Fraser travelled to the UK to coincide with Trump\u2019s visit.\u00a0<\/p>\n Citi was among the large Wall Street banks to report bumper year-on-year increases in second-quarter earnings last month. Its profit climbed 45 per cent to $5.8bn as investment banking helped lift quarterly revenue to its highest level in a decade. Presenting the results to investors, Fraser said the bank\u2019s reorganisation<\/a> is bearing fruit.<\/p>\n One of Citi\u2019s sharpest critics, Wells Fargo analyst Mike Mayo told Bloomberg TV that the new structure, which simplified the sprawling group into five business segments \u2014 services, banking, markets, wealth and US consumer cards \u2014 each with a CEO responsible for specific targets, is \u201cnight and day different from Citigroup of the past, and frankly better than some of their peers too\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"Citigroup chief executive Jane Fraser says she is \u201cworried\u201d a potential windfall tax on banks under new Prime…\n","protected":false},"author":2,"featured_media":98292,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[26],"tags":[13173,661,27,5],"class_list":["post-98291","post","type-post","status-publish","format-standard","has-post-thumbnail","category-london","tag-banking-markets","tag-exclusive","tag-london","tag-uk"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/117046518957559020","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/98291","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=98291"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/98291\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/98292"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=98291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=98291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=98291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}