By Lawrence White
London — Barclays increased its profit by 12% in 2025 and on Tuesday raised its performance targets as the British bank looks to improve returns by focusing on its core US and UK markets and using technology such as AI to cut costs.
Profit before tax for 2025 of £9.1bn was up from £8.1bn the year before and broadly in line with an average of analysts’ forecasts.
Barclays also said it now expects to make a return on tangible equity of greater than 14% by 2028, up from previous guidance of greater than 12% in 2026.
Like many European banks, Barclays has enjoyed rising profits and a share price that has soared towards highs not seen since the aftermath of the financial crisis. A favourable interest rate environment and more supportive economic backdrop have enabled banks to put nearly two decades of post-2008 crisis restructuring behind them.
Barclays CEO CS Venkatakrishnan, known as Venkat, said the bank’s aim is “to secure sustainably higher returns”, with a focus on profitability and returning more than £15bn of capital to shareholders between 2026 and 2028.
Barclays will harness AI to increase productivity and efficiency, for example by designing better and faster products, Venkat said, without giving details on how much the bank will cut jobs as a result of such changes.
The results and new targets are overall somewhat muted, analysts at Citi said, with investors likely to be sceptical about its ambition to grow revenue from its US consumer bank in particular, given heavy competition from domestic incumbents.
Share buybacks
Barclays reported income at its investment bank rose 11% to £13bn in 2025, as its global markets trading business grew revenue 15% amid volatile markets. However, investment banking fees fell 2%, undershooting double-digit gains from Wall Street rivals after missing out on key transactions, a problem previously flagged by the CEO.
London-based Barclays announced £1bn in share buybacks and a 5.6p per share final dividend, taking total capital distribution for 2025 to £3.7bn, in line with analysts’ expectations for £3.8bn.
Barclays follows rival Lloyds in setting out more ambitious profit guidance, as British banks benefit from higher rates, a more favourable regulatory and economic environment, and the cost-saving potential of technology. NatWest, which will report earnings on Friday, and HSBC (February 25) are expected to announce more ambitious targets, Reuters reported last month.
UK banks are looking for ways to increase fee-based income from areas such as wealth management to offset an expected drop in interest income as rates fall. NatWest on Monday announced its largest acquisition since the financial crisis with a £2.7bn deal, including debt, to buy one of Britain’s biggest wealth managers, Evelyn Partners. Barclays had been among the bidders, Reuters reported.
