Barclays to Give Investors £15 Billion After Profit Beat

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(Bloomberg) — Barclays Plc said it will return at least £15 billion ($20.5 billion) to shareholders through 2028 as it continues to work through a long-term plan to slash costs and improve profitability.

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To hit its new targets, Barclays said it will make efficiency savings of about £2 billion, including through the use of artificial intelligence, while allocating more capital to its UK business at the expense of the investment bank.  

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Shares in Barclays pared initial gains and were trading 0.7% higher at 8:57 a.m. in London. The planned capital returns between 2026 and 2028 were below consensus of £16.8 billion, with analysts at Royal Bank of Canada questioning “whether the bank is holding back on distributions to facilitate M&A.”

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Barclays noted in its release that the decision “provides capacity for additional investment and growth, exceeding the level of investment in the current plan.”

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The lender’s earnings for last year beat expectations, helped by the best fourth-quarter for its traders since a reporting change in 2016. Fixed income traders beat estimates to bring in £1.02 billion, up 9.6% year on year, while equities traders pulled in £703 million, up 16%. Both were the best fourth-quarter results since at least 2016, when the bank changed its reporting structure. 

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Investment bankers, though, narrowly missed expectations with broadly flat fourth-quarter income of £606 million. 

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Speaking on Bloomberg TV, Chief Executive Officer CS Venkatakrishnan said all parts of the bank were “firing on all cylinders.”

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“We are already competing very successfully in investment banking with US rivals,” Venkatakrishnan said. “There are sectors where we are very competitive with the top five and that has always been the calling card of Barclays.”

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The bank also announced a £1 billion buyback, taking the total return to £3.7 billion for the year. 

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The new targets build on a major cost-cutting plan that Barclays unveiled in 2024, which also involved reorganizing its reporting structure. At the time, the lender said it would return £10 billion to shareholders by 2026 and reduce costs by £2 billion.

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Income at Barclays’ private bank and wealth management arm increased 5% in the quarter. That was driven by an uptick in deposits and invested balances.

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In the UK, the acquisition of Tesco Bank in late 2024 helped lift the firm’s credit card balances by 9%, while corporate and mortgage lending both grew compared to a year ago. 

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“We believe that the group’s plan is achievable in the current economic environment with the potential for Barclays to become a 15% ROTE bank over time,” analysts at JPMorgan Chase & Co., including Kian Abouhossein, said in a client note.

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—With assistance from Macarena Muñoz, Guy Johnson, Anna Edwards and Tom Mackenzie.

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(Updates with CEO comment, earnings details throughout.)

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