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TSB CEO Calls on Osborne to Drop Bank Surcharge on Small Lenders

TSB CEO Calls on Osborne to Drop Bank Surcharge on Small Lenders

TSB Banking Group Plc Chief Executive Officer Paul Pester called on the U.K. government to exempt smaller lenders from a surcharge on earnings to help them expand in a market dominated by the country’s five largest banks.

Under Chancellor of the Exchequer George Osborne’s budget announced on July 8, banks with a pretax profit of at least 25 million pounds ($39 million) will face a surcharge of 8 percent on top of their corporate tax from next year. Pester said on Thursday that he would encourage raising the profit threshold to about 200 million pounds or 250 million pounds.

“I’m very supportive of the approach, but we are encouraging the Treasury to think again on the lower limits,” Pester told reporters on a conference call. “The levy makes sense but I would like to see the minimum level increased. I would like to see an extra zero on the end of it.”

Osborne said earlier this month that he will cut a levy on large banks over six years and limit it to domestic balance sheets, following pressure from firms including HSBC Holdings Plc that threatened to move abroad. To offset the reduction, he introduced the surcharge.

TSB, which was acquired by Spain’s Banco de Sabadell SA, said on Thursday that first-half pretax profit dropped 44 percent to 23.2 million pounds.