Many on our panel have congratulated banks on returning to profit, but have equally raised questions over bank responsibility to the Government and the taxpayer, a survey has found.
The issue has come to fore as many high-street banks have just posted record profits for this year. Profits of Britain’s biggest bank, HSBC (which incidentally has not received any Government funding), have doubled to £7 billion as reported in half-year banking performance figures this week, while partially Government-owned Lloyds Banking Group has posted pre-tax profits of £1.6 billion for the most recent financial year.
While many of the participants asked to give their views on the figures are relieved banks are profitable, signalling ‘good news for the taxpayer’ and a boost to the economy, others feel it is ‘maddening’ and ‘unfair’ that banks can make such profits while others are still suffering hardship.
Business and bonuses
Some have stated that the system should recognise that banks not in public ownership are a business, ‘there to make a profit, provided they are supporting their customers and are being sensible in terms of their lending.’
Banks such as RBS (Royal Bank of Scotland), in which the Government takes an 83% stake in shares, and Lloyds TSB (41% government owned) have been encouraged by many respondents to pay back what they owe to the Government in order to ‘sort out the financial mess the UK is in’.
Numerous panellists balanced their view, with one stating ‘it is good for the economy but they now need to show how the people who helped them out (taxpayers) can benefit from this, e.g. loans for SMEs and lower admin costs for the general public’. Other respondents encouraged more aggressive measures such as an increased, or one-off, Windfall Tax to pay to the Government.
And instead of bonuses, many advocate banks retaining a share of profits as collateral to protect against any further collapse, with a ‘statutory requirement to pay a predetermined percentage of those profits back to the Exchequer at the end of every accounting period’.
Unsurprisingly, even as the economy climbs the first few rungs of recovery, it seems tempers still run high when it comes to the banks many still view as guilty perpetrators for the worst financial crisis in decades.
