Citigroup Chief Executive Dame Jane Fraser has warned that the UK’s high tax burden on banks risks making London a less attractive destination for investment, saying further increases could encourage financial institutions to move business elsewhere.
Speaking during a visit to London, Fraser said banks face an effective tax rate of about 48% in the UK, compared with around 27% in New York. She also pointed to lower rates in other financial centres, including Dublin, Frankfurt and Paris, arguing that international banks carefully consider tax differences when deciding where to book business.
“Money votes with its feet,” Fraser said, adding that higher taxes make it more difficult to justify conducting business in London when clients have alternative financial hubs available.
She said London remains a critical global financial centre with strong talent, infrastructure and a respected regulatory framework, but warned that these strengths could be undermined if the cost of doing business continues to rise.
“If the taxes go up even higher, then that makes it an easier decision not to book it in London,” Fraser said.
Asked about concerns over the possibility of a new bank tax under Andy Burnham’s government, Fraser said London plays an essential role in the global financial system and should remain competitive.
“The world needs London to work well and to continue to prosper and innovate,” she said, while noting that Citi also has investment opportunities in France, Germany, Hong Kong, Singapore and Japan.
Although she stressed that she was not predicting a crisis, Fraser said she was worried about London’s long-term competitiveness and did not want to see the city lose its standing among the world’s leading financial centres.
Citigroup employs about 14,000 people in the UK and is preparing to open new offices in Canary Wharf. Fraser has led the bank since March 2021, during which time Citi’s share price has nearly doubled.
Her remarks add to growing concerns voiced by banking executives over the UK’s tax regime. JPMorgan Chase Chief Executive Jamie Dimon previously warned that higher bank taxes could force the lender to reconsider plans for its new Canary Wharf headquarters, saying the existing levy had already cost shareholders billions of dollars. Barclays Chief Executive C.S. Venkatakrishnan has also urged ministers not to increase taxes on the banking sector.
Banks operating in Britain pay corporation tax, an additional surcharge on profits and a separate levy on balance sheets. According to UK Finance, the effective tax rate for a corporate and investment bank in London stood at 46.4% in 2025, compared with 27.9% in New York, 28.9% in Dublin and 38.9% in Frankfurt.
Fraser also said many people in the United States view Britain as having become less influential internationally following years of political change. While she stopped short of describing the country as diminished, she said the UK was “not as important in the world as it used to be.”
She added that Britain still has significant strengths and the potential to prosper, but said maintaining London’s competitiveness would require careful policy decisions in the years ahead.
