Lloyds and NatWest Shares Fall on UK Bank Tax Hike Fears

Key Facts

Lloyds shares fell 1.9% and NatWest dropped 1.8% in London trading on Friday morning. Proactive Investors reported that the decline follows rising expectations that Chancellor John Healey could increase taxes on banking profits in the October 28 budget. The lenders led losses on the FTSE 100 as investors began pricing in a potential tax surcharge on the sector's earnings.

LYG closed at $5.47 on October 15, 2026, while RBSPF closed at $8.90 on the same date. The downward pressure stems from concerns that the UK government may target bank profits to bolster tax revenue, with reports suggesting that a revised bank surcharge could raise more than £2 billion annually.