Barclays (NYSE:BCS) said it delivered on its financial targets and guidance for full-year 2025 and used its results presentation to outline updated goals for the next three years, including a higher return ambition, stepped-up investment, and larger shareholder distributions.
2025 performance and shareholder distributions
Management said the group achieved all financial targets and guidance in 2025, generating 11.3% return on tangible equity (ROTE). Total income rose 9% year over year to GBP 29.1 billion, and the group met its net interest income (NII) guidance for both the group and Barclays UK. Barclays also reported an improved 61% cost-income ratio and a 52 basis point group loan loss rate, which it said was comfortably within its through-the-cycle guidance of 50–60 basis points.
In addition, the company said it would grant approximately GBP 500 of shares to the “vast majority” of colleagues (essentially all full-time employees outside of managing directors), describing the program as a way to align employees with shareholder outcomes.
Income, net interest income, and the structural hedge
CFO Anna Cross (as presented in the transcript) said a weaker U.S. dollar reduced reported income, costs, and impairments. Still, profit before tax rose 13% to GBP 9.1 billion, while earnings per share increased 22% to GBP 0.438. Pre-provision profit rose 13%, supported by income growth and efficiency actions, which the bank described as delivering “3% positive jaws.”
Barclays’ group NII increased for the fourth consecutive year, rising 13% to GBP 12.8 billion. Management attributed the growth to stable deposits supporting structural hedge income, lending growth across divisions, and operational progress in the U.S. Consumer Bank that improved NII and net interest margin.
On the structural hedge, management said it assumed reinvestment of 90% of maturing hedges but fully reinvested throughout 2025 and did so at higher rates than planned. Hedge income rose GBP 1.2 billion to GBP 5.9 billion, contributing 46% of group NII (excluding the investment bank and head office). The bank also noted it increased average hedge duration from 3 years to 3.5 years, which it said supports predictability.
Barclays upgraded its expectation for 2026 group income to circa GBP 31 billion from circa GBP 30 billion, citing strength and predictability of stable income streams. It also said it was “more confident” in delivering greater than 12% ROTE in 2026.
Costs, efficiency, and credit quality
Barclays said it delivered GBP 700 million of gross efficiency savings in 2025, above its GBP 500 million target, and GBP 1.7 billion cumulatively toward a GBP 2 billion target by 2026. Total costs increased by GBP 1.0 billion to GBP 17.7 billion, with nearly half of the increase attributed to the addition of Tesco Bank. The company also cited “one-off” items in its 2025 cost base, including a GBP 235 million motor finance provision in the third quarter and roughly GBP 50 million of one-off costs in the fourth quarter.
On credit, Barclays said the “credit picture remains benign,” with low and stable consumer delinquencies and wholesale loan loss rates below the through-the-cycle range. Management added that calibration of impairment models to better capture consumer behavior lowered loan losses in Barclays UK in 2025 and said it expects the Barclays UK loan loss rate to be closer to 30 basis points from Q1. In the U.S. Consumer Bank, management said delinquencies were seasonally higher in the fourth quarter, and it reiterated that Q1 loan loss rates tend to remain elevated following holiday-related spend.
Business highlights across divisions
Management said all divisions generated double-digit ROTE in 2025. It also emphasized ongoing efforts to rebalance the group toward the “three highest-returning U.K. businesses,” stating it had delivered GBP 20 billion of its targeted GBP 30 billion risk-weighted asset (RWA) growth by the end of 2026, including GBP 7 billion in 2025.
- Barclays UK: Full-year ROTE of 20.7% and full-year NII of GBP 7.7 billion in line with guidance. The bank expects Barclays UK NII of GBP 8.1–GBP 8.3 billion in 2026, with structural hedge expected to add about GBP 550 million. Management flagged a roughly GBP 100 million mortgage margin impact in 2026 tied to maturities of higher-margin loans written during the stamp duty holiday, weighted to the first half.
- UK Corporate Bank: Full-year ROTE of 18.9%. Q4 income grew 18%, while costs rose 8% as the bank accelerated discretionary investments. Lending grew 18% year over year, and market share rose 100 basis points to 9.6%.
- Private Bank and Wealth Management: Full-year ROTE of 26.3%, which management said kept it on track for a greater-than-25% target for 2026. Q4 ROTE was reduced to 12.6% by higher costs from accelerated investments and a “historic litigation charge.” Assets under management grew 11%, with more than half of growth attributed to GBP 3.3 billion in net new AUM.
- Investment Bank: Full-year ROTE of 10.6%, up 210 basis points. Management said more stable income from financing and the International Corporate Bank grew 14% and represented 42% of investment bank income (up from 32% in 2022). In Q4, markets income in U.S. dollars rose 17%, with FIC up 14% and equities up 21%. Management also cited a strong M&A pipeline and said its share of announced fees and volumes due to complete in 2026 increased year over year.
- U.S. Consumer Bank: Full-year ROTE increased to 11% (up 190 basis points). Q4 ROTE was 15.8%, supported by a one-off benefit; management said adjusted Q4 ROTE was 12.5%. The bank said a review of customer behavior led to updated accounting assumptions that produced a one-off benefit of roughly GBP 45 million in Q4 non-NII and will shift about GBP 50 million from non-NII to NII starting in Q1, with a broadly equivalent increase in NII.
Targets through 2028: returns, distributions, and investment
CEO Venkat (as presented in the transcript) said Barclays is targeting a ROTE of greater than 14% in 2028, up from a greater-than-12% target for 2026. Management said stronger capital generation should enable greater than GBP 15 billion of distributions across 2026–2028, while also doubling investment compared with the prior three years to support technology modernization and AI adoption.
Barclays also discussed capital and regulation, reiterating its 13%–14% CET1 target range and noting it has been operating around the top of the range ahead of expected regulatory developments. Management said it continues to expect GBP 19–GBP 26 billion of regulatory RWA inflation, including an estimated GBP 16 billion effect from IRB migration in the U.S. Consumer Bank, with about GBP 5 billion expected with Basel 3.1 implementation on 1 January 2027.
In its Q&A, management emphasized that the plan is designed to keep delivery “in our control,” including by not relying on potential regulatory tailwinds, while maintaining capacity to invest further if opportunities meet a high bar relative to shareholder returns.
About Barclays (NYSE:BCS)
Barclays PLC (NYSE: BCS) is a British multinational bank and financial services company headquartered in London. The firm provides a broad range of banking and financial products to individual, corporate and institutional customers. Its core activities span retail and business banking, credit cards and payments, corporate and investment banking, and wealth and investment management.
In retail and business banking, Barclays offers deposit accounts, mortgages, personal and business loans, and card services.
