Dame Jane Fraser, the chief executive of Citigroup, has said she is “worried” about the UK’s tax rate on banks, which she put at about 48 per cent in London against 27 per cent in New York, warning that further rises could jeopardise investment.
Speaking on a visit to London, Fraser said the UK rate was higher than in New York, Dublin, Frankfurt and Paris. “Money votes with its feet,” she said.
Fraser, who runs the third-largest US bank, put Dublin’s rate at around 28 to 29 per cent.
“It makes it a tougher decision,” she said. “It’s already one of the most expensive centres in the world. Your clients have a lot of choices where things get booked. We have to make choices to where things get booked. If the taxes go up even higher, then that makes it an easier decision not to book it in London.”
Asked whether she was concerned about a new bank tax under Andy Burnham’s government, Fraser said: “Where I get concerned about it is London is such an important centre, a financial centre around the world. The world needs London to work well and to continue to prosper and innovate.
“There aren’t great alternatives. We need stronger alternatives to New York around the world because you need the diversification. But money votes with its feet.”
Fraser named France, Germany, Hong Kong, Singapore and Japan as alternative places for Citi to invest.
“The UK is important. It’s got talent, it’s got infrastructure, it’s got pretty sensible regulatory capabilities and the like,” she said. “But that difference, and I hate to be Scottish, it gets overcome pretty quickly. I am quite worried about it.
“I’m not sitting there going: ‘Okay, this is a catastrophe.’ But we care about the UK. This is a very important centre for Citi. I don’t want to see London diminished.”
Citi employs 14,000 people in the UK and is opening new offices at Canary Wharf in London. Fraser took over as chief executive in March 2021, and shares in the bank have almost doubled since.
Her comments follow a similar warning from Jamie Dimon, the JP Morgan chief executive, who has criticised the bank levy and said the tax has cost his shareholders $5 billion. Dimon said in May that JP Morgan would “reconsider” its planned Canary Wharf skyscraper if the bank’s UK tax bill climbed “too much”. CS Venkatakrishnan, the Barclays chief executive, has also urged ministers to resist further bank tax rises.
Banks in the UK pay a surcharge on profits in addition to corporation tax, alongside a levy on balance sheets. UK Finance, the industry body, put the total tax rate for a model corporate and investment bank in London at 46.4 per cent in its 2025 study, against 27.9 per cent in New York, 28.9 per cent in Dublin and 38.9 per cent in Frankfurt.
Fraser also said the UK was seen as “baffling” in the US. “I think some of the political changes that have happened in the UK are strange to the States, as to why there’s been so much change and why that’s happened. Then I think they see the UK as a bit diminished from what it used to be. But there is a desire and want for the UK to succeed.”
Asked whether she thought the UK was diminished, Fraser said: “Not so much diminished, it’s a little different. I think that it’s not as important in the world as it used to be. Some of that’s probably been our own doing. But it’s also the world’s changed a lot. It’s a more muscular world, it’s a more scaled world. I think the UK has a chance to prosper a lot. But it’s got some work to do.”
Fraser, 59, was born in Scotland and studied economics at the University of Cambridge before taking an MBA at Harvard. She joined Citi in 2004 after a decade at the consultancy McKinsey and has lived in the US for almost 20 years.
