Nationwide CEO speaks out against new banking levy
(20 August 2015 – Britain) According to Nationwide chief executive Graham Beale, the changes to the banking levy announced in the United Kingdom Budget will have a disproportionate effect on smaller lenders and would cost the customer-owned group £300 million (A$640 million) over five years.
For the first quarter of its financial year, Nationwide reported an increase of almost 50 percent in its pre-tax profit from £253 million last year to £379 million for the three months from April and June.
“The proposed changes to the bank levy and introduction of the tax surcharge on banking companies announced in last month’s budget may benefit UK headquartered international banks but will have a disproportionate effect on building societies such as Nationwide,” Beale said.
“This represents a missed opportunity to support diversity by acknowledging that building societies are different to banks and to recognise the contribution Nationwide and other mutuals make by lending to the UK economy, and the housing market in particular.”
The building society said that the impact of the changes to the banking levy and the introduction of a tax surcharge announced in the budget will cost £300m over the next five years.
“This is equivalent to the capital required to support about £10bn of lending,” a statement said.
Nationwide is not the only bank to criticise Chancellor George Osborne’s timetable of reductions from 0.21 percent to 0.18 percent from January 2016 and 0.17 percent from January 2017 before reaching 0.10 percent from January 2021.
Beale believes customer-owned lenders such as Nationwide should be treated differently to banks because they are less of a risk to the British economy.
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