NatWest, Lloyds rebound as analysts downplay tax concerns

UK bank stocks rebound after sharp falls on tax fears, as analysts say selloff was overdone and a reserve levy unlikely. [https://invezz.com/wp-content/uploads/2025/09/image-14.webp] British bank stocks recovered modestly on Monday after sharp losses last week, with analysts arguing that fears of new taxes on the sector may be overstated. NatWest (NWG) shares, which fell 4.9% on Friday, and Lloyds (LLOY), which dropped 3.4%, were both trading in the green at market open on Monday. The declines followed calls from a think-tank for an additional levy on banks and a Financial Times report suggesting industry leaders were concerned the government could raise revenue by targeting lenders. However, several analysts believe the scale of the selloff was excessive given the uncertainty surrounding any potential tax measures. ANALYSTS DISMISS SCALE OF SELLOFF Jonathan Pierce, analyst at Jefferies, said in a Reuters report that the recent market reaction did not match the likelihood of the proposal being enacted. “If it were genuine flag-flying by HMT (the British Treasury), one might expect a modest selloff. But a 5% hit to domestic banks on the back of…