Barclays kicks off £15bn shareholder bonanza after profit rises
Barclays kickstarted plans to dish out heaps of cash to shareholders on Tuesday after the bank’s profit breezed ahead of expectations for the 2025 financial year.
The FTSE 100 giant launched a fresh £1bn share buyback after pre-tax profit soared 13 per cent in the last 12 months to £9.1bn. This came ahead of internal analyst consensus of £9bn.
The bank said it intended to splash out over £15bn through dividends and buybacks between 2026 and 2028 in a bid to secure sustainable high returns. Barclays is targeting a return on tangible equity – a crucial measure that indicates a firm’s profitability relative to shareholder equity – of greater than 14 per cent.
Total returns reached £3.7bn in 2025 with the inclusion of the new buyback – a rise of 23 per cent from 2024.
The new plans come after chief executive CS Venkatakrishnan, known as Venkat, said the bank hit all its financial targets in 2025.
Barclays’ chief eyes investment bank overhaul
The American banker has spearheaded a mission to revamp the lender’s investment banking division with a headline pledge to slash its share of group risk-weighted assets from 58 per cent to a leaner 50 per cent by 2026.
The powerhouse division still contributed a whopping £13.1bn to the bank’s revenue – making up 45 per cent of a total £29.1bn.
In the earnings report, the investment bank still accounted for 55.1 per cent of the group’s total risk-weighted assets, marking a clear reduction from previous highs but still leaving a gap to Venkat’s target.
As part of the mission to make the division leaner, the bank has stripped back costs with the investment bank’s cost-to-income ratio – a key metric of financial stability – falling to 62 per cent from 67 per cent.
“Our progress in the past two years provides a strong foundation to deliver more for our customers, clients and shareholders,” said Venkat.
Betting on AI
The Barclays chief has also laid out plans to harness AI to champion the bank’s £2bn of cost cuts over the next three years.
“I really think of this as an empowering technology for our colleagues and our employees because I think it equips them for what will be the new age of technology,” he said.
The bank insisted it was not aiming towards “headcount objectives” and was focused on “improving and harmonising the legacy technology” it currently has.
Analysts at UBS said last month banks would be “pressed hard this year” to share a “coherent financial story for AI implementation: what is being spent now and what it means for the future shape of expenses overall and headcount in particular.”