Calls for windfall taxes on UK banks are misguided, argues the Financial Times. While the big four — Lloyds Banking Group, HSBC, Nat West and Barclays — earned over £200bn in pre-tax profits over five years, their returns on equity average just 12%, barely above their cost of capital. By contrast, Games Workshop achieved a 67% return but is celebrated as a success story. A windfall implies sudden unearned gains, yet current Bank of England rates of 3.75% merely reflect normalization from historic lows that strained bank models. Even Nat West's 24% compound annual net income growth matches retailers like Next and Coca-Cola Europacific Partners. This year's headline profits benefit from derivatives hedging, while underlying margins decline due to competition.

Imposing such taxes risks capital flight. JPMorgan Chase chief Jamie Dimon has threatened to redirect investment, while Santander chair Ana Botín calls UK taxes economically nonsensical. Domestic banks would likely pass costs to customers via higher loan rates or lower deposit yields, undermining Chancellor John Healey's growth mission by making mortgages and business expansion more expensive.