- Barclays reported a 13% jump in annual pre-tax profit to £9.1 billion for 2025, meeting all financial guidance and triggering a new £1 billion share buyback.
- The bank pledged to return over £15 billion to shareholders between 2026 and 2028 through dividends and buybacks, aiming for a Return on Tangible Equity (RoTE) of at least 14%.
Barclays Profit Jump: Why the Investment Bank is Raising the Stakes
Barclays shares are navigating a “post-earnings reset” this Wednesday, February 11, as investors digest a robust set of 2025 results. The UK lending giant delivered a pre-tax profit of £9.14 billion, surpassing analyst expectations and marking a significant improvement over 2024’s £8.1 billion. The bank’s strategy to become a “simpler, better, and more balanced” institution is clearly paying off, with a Group Return on Tangible Equity (RoTE) of 11.3%, up from 10.5% the previous year.
The star of the show was the Investment Bank division, which saw income rise 11% to £13.1 billion. While it remains the group’s lowest-returning unit, its RoTE improved to 106%, buoyed by strong trading revenues in fixed income and equities. CFO Anna Cross noted that the bank is targeting a 12% RoTE for the investment wing this year, predicated on increasing market share in advisory and capital markets rather than relying on industry-wide fee growth.
Barclays AI Strategy Drives £2 Billion Efficiency Push as CEO Pay Hits £15 Million
Beyond the balance sheet, the narrative at Barclays has shifted toward technology. CEO CS Venkatakrishnan, known as “Venkat”, has made Artificial Intelligence the cornerstone of the bank’s 2028 vision. After successfully executing £700 million in cost savings in 2025 alone, the bank is now targeting a staggering £2 billion in gross efficiency savings by 2028.
“To me, the promise of AI is not just efficiency,” Venkat told reporters, emphasizing that the technology will streamline routine tasks to free up staff for high-value client work. This performance-driven culture was reflected in the executive suite, as Venkat was awarded a £15 million pay package for 2025. While the 29% pay hike has drawn scrutiny, the bank pointed to a 15% increase in the total staff bonus pool (£2.2 billion) as evidence of a broad-based reward for hitting key milestones.
Barclays Faces Macro Risks From Motor Finance Redress and US Economic Data Volatility
Despite the celebratory tone, Barclays is not without its challenges. The bank has ring-fenced an additional £235 million to cover the potential costs of the FCA’s motor finance redress scheme, bringing its total provision to £325 million. While this is lower than some of its peers, the final policy statement from the regulator, expected in the coming weeks, remains a key risk factor for the UK retail division.
Additionally, the weak US Dollar has acted as a drag on fixed-income and equities revenues when converted back into sterling. With the US Nonfarm Payrolls and CPI data looming this week, Barclays’ international corporate bank, which relies heavily on transaction banking, is particularly sensitive to currency fluctuations.
Conclusion: A Shareholder-Friendly Roadmap to 2028
Barclays share price has delivered an “unambiguously shareholder-friendly” plan. By hitting every line of its 2025 guidance and raising its 2028 RoTE target to over 14%, the bank has positioned itself as a top-tier European performer. While the motor finance scandal and AI implementation risks remain, the massive £15 billion capital return plan provides a significant safety net for the stock price.