Lloyds hit back at calls for a windfall tax on banks as Britain’s biggest lender posted bumper profits even as it counted the cost of the car finance scandal.
Reform leader Nigel Farage has vowed to stop banks getting ‘free money’, worth an estimated £20billion a year, on deposits held risk-free at the Bank of England.
But Lloyds boss Charlie Nunn warned that could curb lending to households and firms.
‘A strong economy needs strong banks,’ he said as Lloyds unveiled annual profits of £6.7billion in 2025, up from £6billion in 2024 despite taking an £800million charge to compensate customers unfairly sold car loans, bringing its total bill to £1.95billion.
Lloyds set aside £795million to cover the cost of loans that may not be repaid.
But this did not stop it announcing a share buyback of up to £1.75billion and a 15 per cent rise in the dividend to 3.65p a share.
Concerns: Lloyds boss Charlie Nunn (pictured) warned that a windfall tax on banks could curb lending to households and firms
Lloyds shares rose 0.9 per cent, taking gains in the past year to 68 per cent.
When asked by the Daily Mail, Lloyds refused to say how much it earned from interest paid on cash reserves held at the Bank of England.
The bank, which told MPs it made £2.6billion in this way in 2023, expects the undisclosed sum to fall.
DIY INVESTING PLATFORMS
AJ Bell
AJ Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund dealing and investment ideas
interactive investor
interactive investor
Flat-fee investing from £4.99 per month
Freetrade
Freetrade
Investing Isa now free on basic plan
Trading 212
Trading 212
Free share dealing and no account fee
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
