Banks on track to beat record 2024 profits in 2025

London, 2 May 2025 - Britain’s biggest four banks are on track to report 14% higher profits in 2025 than in 2024, when they made a record-breaking £45.9 billion, according to new calculations from research and campaign group Positive Money.

With NatWest announcing its profits for the first quarter of 2025 this morning, following HSBC, Barclays and Lloyds Bank earlier this week, Positive Money calculated that this puts their combined pre-tax profits at £136.8bn since the Bank of England began raising the base interest rate in December 2021.

Although the Bank of England hasn’t raised rates since August 2023, its hesitance to cut them has meant that commercial banks still benefit from higher rates that have pushed up mortgage payments and the cost of credit for millions of households.

Whilst the current rate remains 4.5%, banks stand to have made £150bn from the government by 2030, because the government covers the losses the Bank of England is making from paying banks a higher rate of interest on their risk-free central bank reserves, whilst simultaneously selling off government bonds it bought at a loss on what it paid for them. This amounts to roughly £30 billion a year in transfers from the Treasury to the Bank of England to the banks over the next five years.

The ‘big four’ banks have spent 34% (£42bn) of the £124bn they made between 2022 and 2024 on payouts to shareholders via dividends, and a further 26% (£32bn) through share buybacks that often benefit from more generous tax treatment, according to Positive Money’s analysis.

Since the combined first-quarter results of these banks is £13.1 billion, Positive Money argues that if they continue at this rate then banks stand to make £52.4 billion by the end of 2025, a 14% increase on the record-breaking £45.9 billion they made in 2024.

Ellie McLaughlin, Senior Policy and Advocacy Manager, said: 

“Banks are recording record profits at the public’s expense, and handing these directly to shareholders and to bankers via recently uncapped bonuses. 

“What’s more, banks are doing this whilst simultaneously closing down branches, failing to lend to small and productive businesses, and lobbying the government to remove crucial protections put in place after the financial crisis.

“Austerity measures or watering down regulation should absolutely not be on the cards in this context - and if the Treasury refuses to stop footing the bill for Bank of England losses, then it should tax back some of these windfall profits”

Notes:

• Data from the ONS shows that £36.3bn was paid by the Treasury to the Bank of England to cover its losses in the financial year 2024-25: https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/bulletins/publicsectorfinances/march2025 

• Figures from the Bank of England show up to £150bn could be paid out from the Government by 2030 to cover losses from quantitative easing, much of which will be paid to banks in the form of interest on their risk-free reserves. This amounts to roughly £30 billion a year in transfers from the Treasury to the Bank of England over the next five years, according to the Bank’s latest projections: https://www.bankofengland.co.uk/asset-purchase-facility/2024/2024-q4   

• The i Paper worked out that this year's City bonuses at the UK's biggest banks jumped to more than £7bn which is the most in more than a decade: https://inews.co.uk/news/politics/bankers-7bn-bonuses-after-reeves-kept-truss-perks-city-3624929 

• Which? finds that banks and building societies have closed 6,303 branches since January 2015, at a rate of around 53 each month. This represents 64% of the branches that were open at the start of 2015: https://www.which.co.uk/money/banking/switching-your-bank/bank-branch-closures-is-your-local-bank-closing-ayYyu4i9RdHy 

• A new report from Allica Bank finds that there is a financing shortfall of £90bn to small and medium-sized companies: https://www.thetimes.com/business-money/companies/article/lending-gap-for-small-businesses-is-hurting-uks-growth-zmqzq55xm 

• Positive Money finds that UK bank lending to productive industries is falling: https://positivemoney.org/uk/press-release/new-bank-lending-figures-cast-doubt-on-chancellor-s-growth-strategy/ 

About Positive Money:

Positive Money is an international research and campaign organisation working to redesign our economic system for social justice and a liveable planet. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of supporters. Find out more: www.positivemoney.org