LLOYDS and HSBC have reported record profits amid sky-high interest rates and mortgage misery.

Lloyds Banking Group said its yearly profit had soared by more than 50 per cent to £7.5 billion after being boosted by higher borrowing costs.

HSBC on Wednesday unveiled record-high yearly profits of £24bn, up nearly 80 per cent in 2023, and nearly doubled the pay packet for its boss.

Rishi Sunak’s decision to slash the banking surcharge from 8 to 3 per cent last April when he was chancellor has been a “huge gift” to the City, the TUC said today.

TUC general secretary Paul Nowak said: “These eye-watering profits will be met with disbelief — especially when millions are struggling to make ends meet.

“The government has allowed banks to cash in on sky-high interest rates and to benefit from people’s mortgage misery.

“Instead of fixing our crumbling schools and hospitals the PM has handed banks a monster tax break.”

The union federation said slashing the surcharge will lose the Treasury £10bn over the next five years.

It has also led to banks seeing a 1 per cent rise in corporation tax compared with the up to 6 per cent at other businesses, it said.

Positive Money co-executive director Fran Boait said: “Massive job cuts due to sweeping branch closures show that Lloyds certainly didn’t make these profits from providing a better service to its customers. 

“The only fair recourse right now is a windfall tax on bank profits, which the Treasury could use to support the households struggling under the same high rates that have enriched the banks.”

Lloyds, Britain’s biggest mortgage lender with brands Halifax and Bank of Scotland and one of the biggest motor finance providers, said it set aside a remediation charge of £450 million to cover potential costs related to the regulatory probe into historic car finance selling practices.

The Treasury was contacted for comment.