Barclays delivers on 2025 guidance and lines up bigger payouts to 2028
Barclays hit every line of guidance in 2025 and raised the stakes for the next three years. Return on tangible equity (RoTE) came in at 11.3%, earnings per share rose 22% to 43.8p, and the dividend plus buybacks totalled £3.7bn for the year. Management is now targeting RoTE of greater than 14% in 2028 and more than £15bn of capital distributions to shareholders between 2026 and 2028.
There is also a fresh buyback of up to £1.0bn announced alongside these results, with the balance sheet still strong at a 14.3% CET1 ratio – or 14.0% after rebasing for that buyback, at the top end of the 13-14% target range.
Key 2025 numbers at a glance
| Metric | FY25 |
|---|---|
| Total income | £29.1bn (+9%) |
| Profit before tax | £9.1bn (+13%) |
| RoTE | 11.3% (FY24: 10.5%) |
| EPS | 43.8p (FY24: 36.0p) |
| Cost: income ratio | 61% (improved from 62%) |
| Loan loss rate (LLR) | 52bps (within 50-60bps range) |
| Dividend per share | 8.6p (incl. 5.6p full-year) |
| Share buybacks | £2.5bn (incl. new up to £1.0bn) |
| Total capital return | £3.7bn (+23%) |
| TNAV per share | 409p (Dec 2024: 357p) |
| CET1 ratio | 14.3% (14.0% rebased for buyback) |
What drove the beat: income mix, discipline and a sturdy hedge
Income rose 9% to £29.1bn, helped by higher structural hedge income (the interest rate hedge that smooths deposit income), stronger Global Markets, and growth in Barclays UK, UK Corporate Bank and the US Consumer Bank. Group net interest income excluding the Investment Bank and Head Office hit £12.8bn, ahead of guidance and up 13% year-on-year.
Costs were well controlled: the cost: income ratio improved to 61% despite integration spend, inflation and business growth. Barclays delivered £0.7bn of efficiency savings in 2025 and £1.7bn across 2024-2025. Impairments rose to £2.3bn (LLR 52bps), driven by the US cards book – including the acquired General Motors portfolio – and a single-name charge in the Investment Bank, but remained squarely within the through-the-cycle 50-60bps range.
Divisional scorecard: all delivered double-digit returns
- Barclays UK (RoTE 20.7%) – Income +5% to £8.7bn with net interest income up 15% to £7.7bn, aided by the structural hedge and Tesco Bank. Profit before tax dipped 5% to £3.4bn due to the non-repeat of the 2024 Tesco day-1 gain and higher costs, but asset quality stayed robust. Mortgages rose to £172.4bn; NIM was 3.63%.
- UK Corporate Bank (RoTE 18.9%) – A standout year: income +16% to £2.1bn, PBT +33% to £970m, with higher average deposit and lending balances and strong transaction banking. Impairments low at £37m (12bps LLR).
- Private Bank & Wealth Management (RoTE 26.3%) – Income +5% to £1.38bn; client assets and liabilities climbed to £227.6bn on net inflows and market gains. Costs rose with investment in growth; PBT -2% to £375m.
- Investment Bank (RoTE 10.6%) – Income +11% to £13.1bn; PBT +22% to £4.6bn. Global Markets +15% (FICC +16%, Equities +12%), Investment Banking +3% with solid Advisory and DCM. Cost discipline improved jaws; RWAs broadly stable.
- US Consumer Bank (RoTE 11.0%) – Income +11% to £3.68bn on business growth, repricing and the GM portfolio. PBT +27% to £515m despite higher impairments (LLR 496bps) reflecting portfolio mix and US macro uncertainty. NIM was 11.14%.
Capital and liquidity: plenty of firepower for buybacks
The CET1 ratio ended at 14.3%, or 14.0% after the new buyback – comfortably within the 13-14% target range. Risk weighted assets were £356.8bn, down slightly year-on-year, with leverage ratio at 5.1%.
Liquidity remains a strength: the liquidity pool was £337.8bn, with an average LCR of 170.0% and NSFR of 135.2%. Deposits rose to £585.6bn and the loan: deposit ratio improved to 73%.
Guidance and targets: what management is promising
2026 targets
- Group RoTE of greater than 12% with total income of around £31bn.
- Group net interest income (ex-IB and Head Office) greater than £13.5bn; Barclays UK NII £8.1-£8.3bn.
- Cost: income ratio in the high 50s; LLR 50-60bps; CET1 target range 13-14%.
- Plan to return at least £10bn between 2024 and 2026, including a planned £2bn dividend for 2026, with a continued preference for buybacks.
2028 targets
- Group RoTE greater than 14%.
- Capital distributions greater than £15bn between 2026 and 2028.
- Income CAGR greater than 5% (2025-2028), cost: income in the low 50s, and around £2bn gross efficiency savings over 2026-2028.
Opinion: this is an unambiguously shareholder-friendly plan – higher returns, large multi-year distributions and continued cost takeout, while keeping CET1 within a conservative 13-14% range.
Things to watch: impairments, redress and US consumer
- Impairments – Group LLR at 52bps is within range, but the US consumer book remains the most sensitive to macro. Management also retains economic uncertainty overlays tied to US risks.
- Motor finance redress – Barclays has a £325m provision as at 31 December 2025 related to the FCA’s proposed industry-wide scheme. Final rules are expected in February or March 2026. The ultimate cost could differ from the estimate.
- Strategic moves – The GM co-branded cards deal closed in August 2025, and the Best Egg acquisition for $800m is expected in Q2 2026 (after completing the sale of American Airlines co-branded receivables), with a net CET1 uplift of about 6bps in Q2 2026 for the two transactions combined.
- Costs vs growth – Barclays exceeded its 2025 efficiency target (£0.7bn saved vs c.£0.5bn guidance) while investing in growth. Hitting the “low 50s” cost: income target by 2028 depends on sustained delivery of the c.£2bn gross savings plan.
Why this matters for investors
Barclays delivered double-digit RoTE in every division and grew TNAV per share to 409p – its tenth consecutive quarter of growth. The buyback programme continues to reduce the share count, reinforcing EPS and TNAV momentum. Importantly, the capital position allows for ongoing buybacks without straying outside the 13-14% CET1 target band.
The positives: clear delivery against 2025 guidance, improved Investment Bank profitability with better jaws, strong deposit franchise and liquidity, and a material step-up in planned shareholder distributions through 2028. The watch-outs: credit costs in US cards, integration and investment spend, and the uncertainty on UK motor finance redress until the FCA finalises rules.
Near-term catalysts
- Q1 2026 update on income trajectory towards c.£31bn and NII run-rate.
- FCA policy statement on motor finance (expected February or March 2026).
- Execution of the up to £1.0bn buyback and confirmation of ongoing quarterly buybacks.
- Progress on Best Egg completion and the American Airlines receivables sale in Q2 2026.
Bottom line
On balance, this is a strong print with credible, investor-friendly targets. If Barclays executes on the 2026-2028 plan – notably the RoTE uplift and cost reduction – the combination of earnings compounding and sizable buybacks/dividends should remain supportive for shareholders.
