Must read: a results beat for Barclays
ii’s head of investment runs through half-year results from the high-flying UK bank.
29th July 2025 08:41
by Victoria Scholar from interactive investor

Barclays (LSE:BARC) reported a first-half pre-tax profit of £5.2 billion, which was ahead of consensus estimates, while net interest income hit £7 billion, also better than forecasts.
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The recent strength in US bank earnings had some read across for Barclays. Like its Wall Street counterparts, Barclays’ investment banking division saw income increase by 10% in the second quarter, thanks to the tariff frenzy, with volatile market conditions boosting trading activity across FICC (fixed income, currencies, and commodities) and equities.
However, unlike in the US where dealmaking made a comeback, Barclays’ investment banking income suffered on the back of a slowdown in the M&A and IPO space.
In the second quarter, Barclays' UK income increased by 12% thanks to the acquisition of Tesco Bank last November, providing a continued tailwind for revenues. It also enjoyed a boost from the so-called structural hedge, which lessens the group’s susceptibility to interest rate changes. This should help the lender weather the outlook for declining rates from the Bank of England. However, there will still be concerns about a deteriorating economic outlook in the UK and what that means for Barclays’ UK divisions.
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In an encouraging sign, Barclays is sticking to its plan to return cash to shareholders by announcing plans to buy back up to a further £1 billion and issuing a dividend in the first half of 3p per share up from 2.9p in the same period last year. Its increased buyback will lead to less shares in issue which by definition improves dividend per share growth. The lender is planning to deliver £10 billion to shareholders by the end of 2026.
In its key metrics, Barclays delivered a respectable capital cushion, or CET1 ratio of 14% in the first half, up from 13.9% in the first quarter, demonstrating signs of significant strength.
Its Return on Tangible Equity (ROTE) was another highlight, hitting 12.3% in the second quarter, ahead of expectations but down from 14% in the first quarter. Its cost:income ratio also improved to 58% versus 62% year-on-year, helped by around £350 million in gross cost efficiency savings.
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Halfway through its three-year turnaround, Barclays remains on track to achieve its objectives. The bank's financial strength and its geographical and business diversity have been key drivers of its share price, which has risen by over a third this year already, outperforming the FTSE 100 which is up by around 10%.
Analysts are generally upbeat towards the stock, with 13 buy recommendations, 4 holds and no sells. This is a much more positive outlook than for rival Lloyds, which is a consensus hold.
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