Barclays PLC (LSE:BARC) shares rose 2.5% after second-quarter results beat expectations, with analysts highlighting the strong performance of the bank’s investment banking business.
UBS, which has a 'buy' rating and a 415p price target on the shares, says the results were driven by better-than-expected profits from the group’s global banking and markets division.
According to the Swiss bank, Barclays’ profit before tax was 11% ahead of what most analysts had forecast.
The investment bank stood out, with revenues 7% higher than expected, while the UK corporate banking division also did well.
This helped make up for slightly softer numbers from Barclays’ UK and US consumer banking.
UBS noted that, although income from UK lending was a little weaker, this was due to some unpredictable swings in financial markets and is not expected to affect the outlook for the year.
The bank kept its main forecasts unchanged and announced a £1bn share buyback, in line with previous plans.
Barclays is sticking with its aim to deliver a return on equity of around 11% for 2025 and at least 12% the year after, with plans to pay out over £10bn to shareholders between 2024 and 2026.
UBS points out that if the investment banking business keeps growing as targeted, returns could reach 14%. Even with these results, the shares still trade at a discount to European rivals.
Barclay stock rose 9.05p to 370.25p.