Barclays PLC (LSE:BARC) has surpassed market expectations with a robust fourth-quarter performance and confirmed it achieved all financial guidance for 2025, including a return on tangible equity of 11.3% as every division delivered double-digit returns.
Profit before tax rose 13% year on year to £9.1 billion and earnings per share increased 22% to 43.8p.
Tangible net asset value per share grew for a tenth consecutive quarter to 409p. Total capital distributions for the year reached £3.7 billion, including a £1.0 billion share buyback announced alongside the results.
The bank ended the year with a common equity tier 1 (CET1) ratio of 14.3%, or 14.0% after adjusting for the buyback, keeping it at the top end of its 13–14% target range.
Group income for the year reached £29.1 billion, up 9%, while net interest income excluding the investment bank and head office came in at £12.8 billion, meeting guidance.
Operating costs rose 5% to £17.0 billion, partially offset by £0.7 billion in efficiency savings, with the cost: income ratio improving to 61%.
Barclays recorded credit impairment charges of £2.3 billion, with a loan loss rate of 52 basis points, consistent with its through-the-cycle target range of 50–60 basis points.
Chief executive C.S. Venkatakrishnan said: “Barclays achieved all financial guidance in 2025. RoTE was 11.3% as all divisions delivered double-digit RoTE. We distributed £3.7 billion to our shareholders, including the £1.0 billion share buyback announced today, up from £3.0 billion in 2024.”
He added: “Our progress in the past two years provides a strong foundation to deliver more for our customers, clients and shareholders. Our aim is to secure sustainably higher returns through to 2028 and beyond.”
The bank has set a Group RoTE target of more than 12% in 2026, rising to above 14% in 2028. It plans to return at least £10 billion to shareholders between 2024 and 2026, and over £15 billion from 2026 to 2028 through a mix of dividends and share buybacks.
For 2026, Barclays is guiding for group income of around £31 billion, including net interest income of more than £13.5 billion outside the investment bank and head office, and £8.1 billion to £8.3 billion in Barclays UK.
It expects a cost: income ratio in the high 50s and continues to target an LLR of 50–60 basis points.
By 2028, Barclays aims to achieve a cost: income ratio in the low 50s, underpinned by approximately £2 billion in further efficiency savings. It also forecasts income growth of over 5% on a compound annual basis from 2025 to 2028.
The CET1 ratio is expected to remain within the existing 13–14% range through the period, with a shift in internal risk models and regulatory changes expected to impact risk-weighted assets from 2027.
In the final quarter of 2025, Barclays delivered income of £7.1 billion and profit before tax of £1.9 billion, up from £1.7 billion a year earlier, despite the non-repeat of the one-off gain from the Tesco Bank acquisition in 2024. RoTE in the quarter rose to 8.5%.