Barclays shares rise after new buyback launch and jump in income
Barclays has set out plans to shift to a quarterly share buyback after the firm recorded a surge in total income for the third quarter.
The FTSE 100 titan netted £7.2bn in total income, breezing past as internal analyst consensus of £7bn. The figure was also up nine per cent year-on-year.
The bank said it plans to move to a quarterly share buyback with plans to return as part of its plan to return £10bn to shareholders by 2026.
In its third-quarter posting, Barclays launched a £500m share buyback.
Shares in the lender were up over 2.6 per cent as markets opened to 373.95p.
The new buyback came despite the firm near-quadrupling its motor finance provisions to £325m with an extra £235m set aside.
The move follows suit with Lloyds Banking Group, Close Brothers and Bank of Ireland who have all upped their provisions.
Barclays’ fresh provisions weighed on third-quarter profit before tax which came in at £2.1bn – falling in line with analyst expectations, but falling seven per cent year-on-year. For the year-to-date the lender has pocketed £7.3bn.
Barclays makes impairment as jitters hit credit market
The lender also made a £110m “single name” credit impairment charge in its investment banking arm. The charge was related to Barclays’ exposure to Tricolor – a US auto-dealership which sent jitters through the private credit market after its collapse due to loan-defaults.
Barclays, along with its peers JPMorgan and Fifth Third Bancorp, was a warehouse lender to Tricolor.
The bank’s chief CS Venkatakrishnan, said the exposure to Tricolor was “obviously not a surprise but the surprise was the fraud”.
“We take our credit risk management very seriously at all points in the cycle, and credit lending has to be prepared for all outcomes, including fraud,” he said.
Benjamin Toms, analyst at RBC, said: “Whilst we view Barclays revenue diversification positively in the context of the uncertainty surrounding the UK Autumn budget, the bank’s US corporate exposure will receive scrutiny given local trends over the last couple of months.”
But the firm upgraded its return on equity expectations to greater than 11 per cent for the coming year, due to better than expected income and the acceleration of its cost-cutting regime.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Barclays’ latest results show a bank quietly outperforming despite headline noise.
“The extra charge tied to motor finance grabbed attention, but investors had largely priced that in already with shares underperforming in recent weeks.”
He added: “Investment banking edged past estimates but lacked the big gains seen at US rivals, leaving Barclays leaning on its diversified model to deliver steady progress without any major fireworks.”
Investment banking revenue edged up eight per cent to £3.1bn.
Barclays boss in cost-cutting overhaul
CS Venkatkrishnan, known as Venkat, is in the midst of a three-year plan that targets a reduced reliance on the lender’s investment bank.
In a post on LinkedIn last year, Venkat outlined financial targets including a return on tangible equity in excess of 12 per cent and the goal to return over £10bn to shareholders by 2026.
Barclays was reported to have called in global consultancy giant McKinsey earlier this year as part of its bid to identify cost-saving areas across its investment banking arm.
Consultants were tasked with identifying duplication of work and whether tasks can be automated.
As part of further cost-cutting measures, Barclays offloaded its German consumer finance business in July 2024.
The move, completed in February 2025, released around €4bn (£3.4bn) in risk weighted assets and increased the bank’s CET1 ratio – a key measure of a lender’s financial health – by ten basis points.