LONDON: Barclays BARC.L raised its key profit target and announced a fresh 500 million pound ($639 million) share buyback on Wednesday, citing strong performance and cost savings delivered ahead of plan, despite setting aside more money for a UK motor finance probe.
The British bank now expects to deliver a return on tangible equity (RoTE) of greater than 11% for 2025, up from its previous guidance of “around 11%.” It also reaffirmed its existing 2026 target of more than 12%.
“We have been robustly and consistently generating capital for our shareholders consecutively over the last nine quarters,” Group Chief Executive C.S. Venkatakrishnan said in a statement.
The bank said it would bring forward a portion of its full-year capital returns, announcing the 500 million pound buyback with immediate effect. It also plans to move to quarterly buyback announcements going forward.
The capital distribution comes even as the bank took a 235 million pound charge in the quarter for potential redress related to its historic motor finance business, bringing the total provision for the issue to 325 million pounds.
Barclays reported a third-quarter RoTE of 10.6%, bringing its year-to-date figure to 12.3%. Its tangible net asset value per share rose to 392 pence, while its core capital ratio, or CET1, stood at a robust 14.1%.
The bank said it achieved its 2025 cost efficiency savings target of about 500 million pounds a quarter early, following 180 million pounds of savings in the third quarter.
Looking further ahead, Barclays said it would announce new financial targets through to 2028 when it publishes its full-year 2025 results on Feb. 10, 2026.
($1 = 0.7826 pounds)
Q325 YTD Group performance
| ● | Barclays delivered a profit before tax of £7,280m (Q324 YTD: £6,447m), RoTE of 12.3% (Q324 YTD: 11.5%) and EPS of 35.1p (Q324 YTD: 29.3p) | |
| ● | The Group has a diverse income profile across businesses and geographies. The appreciation of average GBP against USD negatively impacted income and profits, and positively impacted credit impairment charges and total operating expenses | |
| ● | Group statutory income increased 11% to £22,063m driven by higher income in Global Markets across FICC and Equities, higher structural hedge income and the impact from Tesco Bank | |
| ● | Group total operating expenses increased to £13,087m (Q324 YTD: £12,143m) | |
| – | Group operating costs increased 6% to £12,661m, reflecting Tesco Bank costs, further investment spend and business growth and inflation, partially offset by c.£530m of cost efficiency savings | |
| – | Litigation and conduct charges of £342m included a £235m charge for motor finance redress in Q325 | |
| ● | Credit impairment charges increased to £1,744m (Q324 YTD: £1,271m), primarily driven by the impact from Tesco Bank, an IB single name charge, the day 1 impact from the acquisition of the GM portfolio, and elevated US macroeconomic uncertainty. Total coverage ratio remains stable at 1.2% (December 2024: 1.2%) | |
| ● | The effective tax rate (ETR) was 21.1% (Q324 YTD: 20.2%) | |
| ● | Attributable profit was £4,980m (Q324 YTD: £4,351m) | |
| ● | Total assets increased to £1,629.2bn (December 2024: £1,518.2bn), driven by higher trading activity in IB and growth in the liquidity pool from increased wholesale funding and deposit growth across businesses. This was partially offset by a reduction in derivative assets and the strengthening of spot GBP against USD | |
| ● | TNAV per share increased to 392p (December 2024: 357p) including EPS of 35.1p, an 11p benefit from the cash flow hedging reserve and a c.6p benefit from the reduction in share count following the completion of the share buyback announced at FY24 Results and the ongoing share buyback announced at H125 Results. These were partially offset by an 8p reduction from dividends paid during Q325 YTD and net negative other reserve movements | |
