Dame Jane Fraser, chief executive of Citigroup, has expressed concern over the current tax environment for banks in the United Kingdom, warning that high tax rates could impact investment decisions. Speaking during a visit to London, Fraser highlighted that the UK’s bank tax rate is significantly higher compared to other financial centers such as New York, Dublin, Frankfurt, and Paris. She emphasized that “money votes with its feet,” suggesting that increased taxes might prompt financial activities to move to lower-tax jurisdictions.
Fraser, who is Scottish and leads the third-largest US bank, noted that London remains an essential global financial hub, but cautioned that the current tax burden—reported to be around 48 percent for banks in London versus roughly 27 to 29 percent in New York and Dublin—makes the city one of the most expensive places for banking operations. While she underscored the UK’s strong infrastructure, talent pool, and regulatory environment, she warned that higher taxes could make alternative locations such as France, Germany, Hong Kong, Singapore, or Japan more attractive for investment and business booking.
The Citi CEO also discussed the broader perception of the UK from the United States, stating that while the UK’s image has somewhat diminished, there remains a strong desire within the business community for the country to succeed. She expressed hope for the government to address some factors traditionally seen as barriers to growth, allowing the UK to reach its full potential.
Regarding the new UK government led by Prime Minister Andy Burnham, Fraser said she has yet to meet him but hopes to do so in the autumn. She praised the government’s current focus on managing the country’s affairs and offered advice based on her own experience: “Have big ears and thick skin,” meaning to listen carefully but remain resolute in decision-making. Fraser stressed the importance of maintaining the competitiveness of the UK’s capital markets, describing them as a key national strength.
Fraser also acknowledged the financial challenges faced by the UK, noting the necessity of balancing fiscal policy in a way that supports growth but remains palatable to markets. She reflected on historical context, citing the UK’s experience with extremely high tax rates in the late 1970s and the negative impact on business development.
On the topic of global financial markets, Fraser described the current environment as “quite precarious,” pointing to volatility in oil prices and technology sector shares as contributing factors. She noted that significant capital expenditure by many companies, some lacking the robust cash flows of tech giants like Google and Microsoft, adds to market uncertainty.
In a lighter moment, Fraser addressed a recent social media post by former US President Donald Trump, who praised her leadership and Citigroup’s performance. Fraser attributed the attention partly to their shared Scottish heritage but clarified that her interactions with Trump have been limited.
Fraser’s own journey—from growing up in Monifieth, Scotland, to leading a major US bank—illustrates a transatlantic professional identity. She studied economics at Cambridge University and earned an MBA from Harvard before joining Citigroup in 2004. She became CEO in 2021 and has since overseen a significant increase in the bank’s share value. Despite residing in the US, she maintains a strong connection to her Scottish roots and family traditions.