Barclays PLC (LSE:BARC) shares fell 5.1% to 503p despite the bank upgrading its 2026 income target and announcing a £1 billion share buyback after stronger investment banking and interest income lifted second-quarter profit.
The FTSE 100 lender reported group income of £8.3 billion in the second quarter, up 16% on a year ago, while pre-tax profit rose 31% to £3.3 billion. Return on tangible equity in the quarter improved to 16.1% from 12.3% a year earlier and 13.5% in Q1.
Investment banking revenue rose 20% to £3.96 billion, beating the £3.66 billion City consensus, as global markets income and advisory fees increased. Fixed-income, currencies and commodities revenue of £1.47 billion fell slightly short of the £1.51 billion forecast.
UK lending balances grew 5% year on year, as mortgage margin pressure partly offset higher structural hedge income at Barclays UK. UK's net interest margin widened to 3.70% from 3.55% a year earlier.
The bank increased its 2026 group income target to around £31.5 billion from £31 billion. Guidance for net interest income excluding the investment bank and head office was raised to more than £13.7 billion from more than £13.5 billion.
Barclays maintained its forecast for full-year return on tangible equity above 12%. It expects its loan-loss rate near the top of its 0.5% to 0.6% range after impairment charges increased to £600 million in the quarter.
Chief executive CS Venkatakrishnan said Barclays had delivered "another strong quarter", supported by UK lending growth and the investment bank performing well "in a favourable environment".
The bank announced a buyback of up to £1 billion and a first-half dividend of 5.9p a share, up from 3p. Total first-half distributions reached £2.3 billion, 61% more than a year earlier.
Broker Jefferies said it was a "slightly messy set of numbers", with an investment banking income beat partly offset by "small misses elsewhere".
"There are also some additional costs (arguably one-off?) coming through in H2 that may not be in estimates," analysts noted.
However, shareholder distributions were "well ahead" of estimates and the outlook showed confidence in its targets.
** UPDATE: Adds share price and broker comments **
