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Highlights:

  • Barclays reports 12.3% RoTE and GBP 2.5 billion PBT in Q2FY25, up from GBP 1.9 billion YoY.
  • Barclays UK income rose 12% YoY, aided by Tesco Bank acquisition and higher structural hedge income
  • Barclays reaffirms 2025 guidance, targets GBP 12.5 billion+ NII and CET1 ratio of 13-14%

Barclays PLC (LSE:BARC), a UK-based universal bank engaged in retail banking, corporate and investment banking, and wealth management, reported a profit before tax (PBT) of GBP 2.5 billion for Q2FY25, up from GBP 1.9 billion in Q2FY24. Group Return on Tangible Equity (RoTE) reached 12.3%, up from 9.9% a year earlier, with all divisions reporting double-digit RoTE. Total Group income rose 14% YoY to GBP 7.2 billion. Group net interest income (NII), excluding contributions from Barclays Investment Bank and Head Office, was GBP 3.1 billion, marking a 12% YoY increase. Income growth was supported by performance across divisions:

  • Barclays UK income grew 12% due to higher structural hedge income and the integration of Tesco Bank.
  • The UK Corporate Bank (UKCB) reported 17% income growth driven by higher deposit and lending balances and hedge income.
  • Private Bank and Wealth Management (PBWM) saw income rise 9%, reflecting increased client activity.
  • Investment Bank (IB) income increased 10%, led by Global Markets, offset by softer Investment Banking.
  • US Consumer Bank (USCB) income remained stable in GBP terms but rose 7% in USD terms, reflecting card balance growth.

Group total operating expenses rose 5% YoY to GBP 4.2 billion, with operating costs at GBP 4.1 billion. The cost: income ratio improved to 59% from 63% in Q2FY24. Credit impairment charges increased to GBP 500 million, compared to GBP 400 million a year earlier, leading to a loan loss rate (LLR) of 44 basis points.

For the first half of Financial year 2025 (H1FY25), Barclays reported a Group RoTE of 13.2%  and PBT of GBP 5.2 billion. Group income grew 12% YoY to GBP 14.9 billion, and NII excluding IB and Head Office reached GBP 6.1 billion, up 13%. Operating expenses for H1 were GBP 8.6 billion, up 5%, including Tesco Bank costs and employee share grant expenses. Cost savings of approximately GBP 350 million were recognised during the period. Credit impairment charges were GBP 1.1 billion, with an LLR of 52bps. The CET1 capital ratio improved to 14.0% from 13.6% at the end of 2024, and tangible net asset value (TNAV) per share increased to 384p.

Barclays reaffirmed its full-year 2025 guidance, aiming for a RoTE of approximately 11%, a CET1 ratio within the 13-14% target range, and Group NII (excluding IB and Head Office) of over GBP 12.5 billion, including over GBP 7.6 billion from Barclays UK. The cost: income ratio is expected to be around 61%, factoring in GBP 500 million in efficiency savings.

Looking to 2026, Barclays targets a RoTE above 12% and Group income of around GBP 30 billion. It aims to return at least GBP 10 billion to shareholders between 2024 and 2026 via dividends and share buybacks. Operating expenses are expected to total GBP 17 billion, implying a cost: income ratio in the high 50s. Total gross efficiency savings of approximately GBP 2 billion are targeted by 2026. The bank also reaffirmed its LLR guidance of 50-60bps through the cycle and aims for Investment Bank (IB) RWAs to comprise around 50% of total Group RWAs by 2026.

BARC shares were trading 0.042 % lower at GBX 361.05 per share as on 29 July 2025.