Barclays investment bank powers £1bn profit jump in first half
Barclays rounded off the first half of 2025 with a major bump in profit as its all-important investment banking arm rallied on global markets turmoil.
The FTSE 100 bank delivered a 28 per cent increase in profit before tax as it topped £5.2bn for the first six months of the year.
The firm’s investment bank pocketed £7.1bn in total income for the half, marking a 13 per cent rise. In the three months ending June 30, the arm’s income jumped ten per cent annually to £3.3bn.
Barclays said a strong performance in global markets, which includes areas such as equities trading, was the main driver in growth. Meanwhile, takings were partially offset by weaker performance in investment banking activity, which includes the likes of mergers and acquisitions.
The banking giant follows suit with its Wall Street peers who closed second-quarter earnings season breezing past analyst expectations as revenues boomed on the back of market volatility.
Equities trading across the globe benefited from the market chaos triggered by President Donald Trump’s ‘Liberation Day’ levies at the beginning of April that caused widespread investor sell-offs.
But as the President rowed back on his trade offensive, investors returned to the market boosting activity.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Barclays delivered a strong earnings beat, driven by a resurgent investment banking division thriving in today’s volatility – mirroring the strength seen across US peers.
“Gains in fixed income and equities trading helped the bank to outpace its US rivals, a space where it’s often underestimated but clearly still in the fight.”
The momentum helped Barclays shares rally over two per cent on Tuesday, despite a dip in early trading. The firm smashed its highest stock price since the financial crisis touching 370p.
Barclays interest income shrugs off falling rates
Group income topped £7.2bn, a 14 per cent hike, as net interest income soared 12 per cent to £3.1bn despite falling UK interest rates.
Barclays announced an additional share buyback of £1bn and a half year dividend of 3.0p per share following the hefty half year growth.
The bank’s operating expenses rose five per cent year-on-year to £4.2bn, which it said reflected the £600m takeover of Tesco Bank completed last year.
Further investment spend, business growth and inflation were cited as partially offsetting near £200m in savings.
But the lender managed to decrease its cost-to-income ratio – which measures a bank’s efficiency by showing how much it spends to earn each pound of income – to 59 per cent, down from 63 per cent last year.
Barclays UK closed the first half with a net interest margin – a key indicator of a bank’s profitability from lending – of 3.55 per cent, up from 3.15 per cent.
The strong performance comes as Barclays’ chief CS Venkatakrishnan, known as Venkat, hits the halfway point in his three-year plan to structurally overhaul the lender.
The bank tapped global consultancy giant Mckinsey in a bid to identify cost-saving areas across its investment arm in hopes the unit will produce a 12 per cent return on tangible equity by 2026.
Venkat said: “We remain on track to achieve the objectives of our three-year plan, delivering structurally higher and more stable returns for our investors.
“At the mid-point of the plan, with six quarters of consistent execution, we have achieved over half of the around £30bn planned UK risk weighted assets (RWAs) growth, half of the target income growth and realised two-thirds of the £2bn planned gross cost efficiency savings.”