Highlights

  • Jefferies issued a bullish view on Barclays with a target price of GBX 560 following FY25 results.
  • Group income increased to GBP 29.1bn in FY25, with all major divisions reporting year-on-year growth.
  • The CET1 ratio increased to 14.3%, remaining within the group’s stated target range.

 

Barclays PLC (LSE:BARC) has come under renewed broker focus after Jefferies issued a bullish view on the bank, setting a target price of GBX 560. The rating might follow the release of Barclays’ FY25 results, which highlighted higher group income, improved returns, and progress against medium-term financial targets. Barclays shares were trading at GBX 477.20 on 10 February, marking a 57.62% increase over the past year.

Broker View Lifts Focus on FY25 Results

Jefferies’ positive stance comes as Barclays reported group profit before tax of GBP 9.1bn for FY25, up from GBP 8.1bn a year earlier. Group return on tangible equity (RoTE) increased to 11.3%, compared with 10.5% in FY24, with all divisions delivering double-digit RoTE during the year.

Group income rose 9% year-on-year to GBP 29.1bn. Net interest income (NII), excluding the Investment Bank and Head Office, increased 13% to GBP 12.8bn, supported by growth across UK and international operations.

Divisional Income Growth Across the Group

Barclays UK income increased 5%, supported by higher structural hedge income and contributions from Tesco Bank NII, partly offset by the absence of a GBP 0.6bn day-one gain recorded in the prior year. Barclays UK Corporate Bank income rose 16%, driven by higher average deposit and lending balances.

Barclays Investment Bank income increased 11%, with growth across Global Markets and Investment Banking. Barclays US Consumer Bank income also rose 11%, reflecting repricing initiatives, business expansion, and the acquisition of the General Motors co-branded cards portfolio.

Costs, Capital and Balance Sheet Position

Total operating expenses for FY25 were GBP 17.7bn, up 6% year-on-year. Operating costs increased to GBP 17.0bn, partially offset by GBP 0.7bn in cost efficiency savings. Credit impairment charges rose to GBP 2.3bn, with a loan loss rate of 52 basis points.

Barclays ended FY25 with a CET1 ratio of 14.3%, compared with 13.6% a year earlier. Risk-weighted assets stood at GBP 356.8bn, while tangible net asset value per share increased to 409p from 357p.

Capital Returns and Financial Targets

Barclays reiterated plans to return at least GBP 10bn of capital to shareholders between 2024 and 2026 through dividends and share buybacks, with quarterly buybacks and semi-annual dividends. For 2026, the bank targets group income of around GBP 31bn and a RoTE above 12%. Longer-term targets include capital returns exceeding GBP 15bn between 2026 and 2028.

Jefferies’ bullish rating places renewed attention on Barclays’ FY25 performance, which showed higher income, increased profitability, and progress on capital and return targets. With updated financial guidance and defined capital return plans, Barclays remains under close market observation as it moves into the next phase of its strategy.

FAQ

Q1: What target price has Jefferies set for Barclays?
A1: Jefferies set a target price of GBX 560 on Barclays shares.

Q2: How did Barclays perform in FY25?
A2: Barclays reported profit before tax of GBP 9.1bn and group income of GBP 29.1bn for FY25.

Q3: What are Barclays’ capital return plans?
A3: The bank plans to return at least GBP 10bn to shareholders between 2024 and 2026 through dividends and share buybacks.