28th Jul 2026 09:53
(Alliance News) - Barclays PLC on Tuesday raised full-year net income guidance after a strong second quarter led by its investment banking division, but higher costs and a mixed divisional performance saw shares fall.
The London-based financial services company said pretax profit leapt 31% to GBP3.25 billion in the quarter ended June 30 from GBP2.48 billion the year prior, with total income surging 16% to GBP8.34 billion from GBP7.19 billion.
Total income beat company-compiled consensus of GBP8.12 billion, with pretax profit beating a forecast of GBP3.12 billion.
For the whole of the half-year, total income is 11% higher at GBP16.50 billion, with pretax profit up 17% to GBP6.07 billion.
"I am pleased with another strong quarter for Barclays," Chief Executive CS Venkatakrishnan said.
Return on tangible equity improved to 16.1% in the quarter from 12.3% a year ago, with all divisions delivering double-digit growth.
By division, pretax profit rose 32% at Barclays Investment Bank to GBP1.72 billion, beating GBP1.56 billion consensus, driven by Global Markets and Investment Banking fees. In particular, Equities revenue jumped 45% on-year, although analysts noted this was still below US peers who reported equities growth of 68%.
But Barclays UK pretax profit was 3% shy consensus, while Barclays Private Bank and Wealth Management was 5% short of consensus and Barclays US Consumer Bank 7% below.
Operating costs increased 8.7% to GBP4.51 billion in the quarter from GBP4.15 billion a year ago, ahead of GBP4.36 billion consensus, reflecting business growth, inflation and further investment spend, partially offset by GBP200 million of cost efficiency savings.
In addition, analysts noted Barclays said it expects GBP450 million of incremental costs in the second half of 2026, including up to GBP300 million structural cost actions and up to GBP150 million for changes to investment banking compensation.
Shares in Barclays fell 4.2% to 508.20 pence each in London on Tuesday morning, the biggest faller on the FTSE 100, which was up 0.1%.
Barclays upped its dividend to 5.9 pence per share from 3.0p, and it announced a new GBP1.0 billion buyback.
It still targets returning GBP10 billion to shareholders between 2024 and 2026, "through dividends and share buybacks, with a continued preference for buybacks".
This year will see a "progressive increase in total capital returns versus 2025".
Looking to 2026 as a whole, Barclays now expects total income of around GBP31.5 billion, ahead of a prior forecast of around GBP31 billion. Total income in 2025 amounted to GBP29.14 billion.
Barclays UK NII is projected around the middle of the GBP8.1 billion to GBP8.3 billion guided range.
In addition, the bank expects a group cost: income ratio of high 50s in percentage terms.
The CEO said Barclays remains "committed to, and confident in, delivering all financial and distribution targets for 2026 and 2028."
It plans to return greater than GBP15 billion of capital to shareholders between 2026 and 2028, through dividends and share buybacks.
By Jeremy Cutler, Alliance News reporter
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