Barclays Shares Jump on Strong Earnings and Optimistic Outlook

Barclays (LON: BARC) shares are trading higher following the release of its full-year 2025 financial results, which exceeded consensus estimates.

Profit before tax reached £9.1 billion. Q4 profit before tax of £1.9 billion was up from £1.7 billion reported for the same quarter last year and was above the company compiled consensus estimate of £1.72 billion.

Markets are reacting positively to the bank's ambitious new targets extending to 2028, including a return on tangible equity (RoTE) of greater than 14% and capital distributions exceeding £15 billion between 2026 and 2028.

The financial institution achieved a RoTE of 11.3% in 2025, with all divisions delivering double-digit RoTE. Earnings per share (EPS) grew by 22% to 43.8p, while tangible net asset value (TNAV) per share increased by 15% to 409p, marking the tenth consecutive quarter of growth. The bank distributed £3.7 billion to shareholders, a 23% increase from £3.0 billion in 2024, comprising a total dividend of 8.6p (£1.2 billion) and total share buybacks of £2.5 billion.

Barclays' robust capital position is underscored by a Common Equity Tier 1 (CET1) ratio of 14.3%. Factoring in the newly announced £1.0 billion share buyback, the CET1 ratio stands at 14.0%, remaining at the upper end of the bank's target range of 13-14%. This strong capital base provides flexibility for future growth initiatives and shareholder returns.

Net interest income (NII) excluding the Investment Bank and Head Office reached £12.8 billion, exceeding the 2025 guidance of greater than £12.6 billion.

Within this, Barclays UK contributed £7.7 billion, also surpassing its target of greater than £7.6 billion. The bank's cost discipline is evident in the improved cost-to-income ratio of 61%, driven by positive operating leverage for the third consecutive year. Cost efficiency savings totaled £0.7 billion in 2025, exceeding the initial guidance of approximately £0.5 billion.

C. S. Venkatakrishnan, Group Chief Executive, commented, “Barclays achieved all financial guidance in 2025,” reinforcing the company's commitment to delivering value to its customers, clients, and shareholders. He also noted the company's plan to “invest further to improve customers' experience and deepen relationships, while harnessing new technology, including AI, to improve efficiency and build segment-leading businesses and drive further growth.”

Barclays' forward-looking guidance includes a RoTE of greater than 12% in 2026 and greater than 14% in 2028. The bank also plans to return at least £10 billion of capital to shareholders between 2024 and 2026, and greater than £15 billion between 2026 and 2028. These targets reflect the bank's confidence in its ability to generate sustainable, higher returns.