Barclays PLC (BARC) entered 2025 in better shape than it’s been in years. The bank reported a 24% jump in pretax profit to £8.1 billion for 2024, just above consensus expectations, as both its investment and retail arms posted double-digit income growth. Attributable net profit also rose 24% to £5.3 billion, though just shy of analyst forecasts. The group’s return on tangible equity (RoTE) rose to 10.5% from 9.0% in 2023, while its CET1 capital ratio remained at 13.6%, reflecting both solid profitability and prudent capital management.
Income across the group hit £26.8 billion, led by gains in the Investment Bank, where equities and FICC revenues surged, and Barclays UK, which continued to grow its lending book and deposits despite softer consumer sentiment. The bank’s board rewarded shareholders with £3 billion in total capital returns for 2024, including an 8.4p full-year dividend and share buybacks, and confirmed plans to return at least £10 billion between 2024 and 2026.
Still, the market reaction was muted. Shares slipped nearly 5% on the day of the results as management largely reiterated existing guidance for 2025 and 2026. For investors who had hoped for raised targets after a year of execution beats, Barclays’ message was clear: this turnaround is working, but it’s not yet time to accelerate the throttle.
Financial Story: A Reset Year With Glimmers of Recovery
Barclays’ 2024 results were objectively strong, but management’s decision to stick to its existing roadmap left the market underwhelmed. Pretax profit of £8.1 billion topped consensus, and income growth of 6% showed momentum across both its UK and U.S. franchises. Yet the tone from executives remained cautious, with 2025 guidance for RoTE (~11%) and net interest income roughly in line with previous plans. Investors had expected a bit more ambition after several quarters of positive surprises.
| Metric | FY 2024 | FY 2023 | YoY Change | Commentary |
|---|---|---|---|---|
| Total Income | £26.8 billion | £25.4 billion | ▲ 6% | Growth led by strong Investment Bank and UK retail business |
| Pretax Profit | £8.1 billion | £6.6 billion | ▲ 24% | Slightly ahead of forecasts, aided by higher trading income |
| Net Profit (Attributable) | £5.3 billion | £4.3 billion | ▲ 24% | Missed consensus slightly but marked best level since 2017 |
| Return on Tangible Equity (RoTE) | 10.5% | 9.0% | ▲ 1.5 pts | On track for >12% target by 2026 |
| CET1 Capital Ratio | 13.6% | 13.8% | ▼ 0.2 pts | Within management’s target range of 13–14% |
| Loan Loss Rate (LLR) | 46 bps | 46 bps | — | Credit costs stable across UK and U.S. portfolios |
| Dividend (Full Year) | 8.4p | 8.0p | ▲ 5% | Total capital return maintained at £3 billion |
| Buyback Programme | £1.75 billion | £1.5 billion | ▲ 17% | Core pillar of shareholder value creation |
That said, the underlying performance marked evident progress. Cost discipline held firm, and the Investment Bank delivered one of its best quarters since 2021, while retail lending in the UK benefited from higher net interest margins before the Bank of England’s first rate cut. Management emphasized that the bank’s transformation, focused on simplifying operations, cutting costs by £2 billion by 2026, and increasing shareholder payouts, is ahead of schedule. Barclays isn’t chasing flashier growth targets; it’s building a sturdier, more predictable foundation.
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Even so, the muted guidance was enough to cool enthusiasm after a 100% rally in shares over the past year. Analysts described the update as “solid but unspectacular,” while noting that Barclays’ valuation remains attractive relative to global peers. The message was simple: the strategy is working, but patience will be required for it to pay off fully.
1. Investment Bank Strength Drives the Engine
Barclays’ investment bank remains the cornerstone of its earnings story, and in 2024, it delivered. The division posted income of £11.8 billion, beating analyst expectations of £11.6 billion, as fixed income and equities trading surged 29% and 40%, respectively. Q4 alone saw trading revenue jump nearly 30% year-over-year, outperforming the average of major U.S. peers and solidifying Barclays’ status as Europe’s most globally competitive markets franchise.
The bank’s ability to maintain high-margin trading while holding costs flat has been a key differentiator. Its share of global banking fees rose modestly to 5.8%, while gains in risk-weighted asset productivity improved efficiency. With HSBC exiting its European M&A and equity capital markets units, Barclays has an opportunity to capture more domestic investment banking business in 2025 and beyond. That said, advisory and dealmaking fees remain uneven across the industry, a reminder that trading-driven outperformance can be cyclical.
2. UK Retail and Consumer Banking: Slow but Steady
Domestically, Barclays UK continues to be the quiet workhorse in the group’s portfolio. Income rose to £8.3 billion, driven by healthy mortgage growth and resilient consumer lending. The acquisition of Tesco Bank’s retail assets in late 2024 added roughly £8 billion in loans and expanded its deposit base, while helping the bank broaden its exposure to mass-market customers. Barclays now aims for £7.4 billion in net interest income (NII) across its UK retail arm in 2025, roughly flat year-over-year.
Still, investors are watching this segment closely as the Bank of England’s rate cuts compress lending margins. The positive side of lower rates is improved borrower demand and credit quality, loss provisions remained stable at 46 basis points, but slower deposit repricing could weigh on NII through 2025. Management described the outlook as “constructive but cautious,” signalling a measured balance between lending growth and capital returns. For a bank that once leaned heavily on its investment arm, the retail pivot adds much-needed stability.
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3. Capital Returns, Cost Control, and Cautious Guidance
If there’s one clear success story, it’s capital discipline. Barclays ended 2024 with a CET1 ratio of 13.6%, giving it room to maintain high shareholder payouts without stretching the balance sheet. The bank returned £3 billion to shareholders through dividends and buybacks last year and has already confirmed another £1 billion buyback for H1 2025, along with a 3p interim dividend, bringing total capital returns to £1.4 billion for the half.
On the expense side, progress is tangible. The £2 billion cost-reduction plan by 2026 remains firmly on track, with around half of the savings already identified through digital streamlining and operational consolidation. Management expects its cost-to-income ratio to stay in the high 50% range in 2025, gradually improving as efficiency gains outpace inflationary pressures. While analysts at KBW and Citi noted the guidance offered “nothing new,” they also agreed the outlook was deliberately conservative, leaving room for potential upgrades if revenue trends hold.
The TIKR Takeaway
Barclays’ transformation story isn’t about reinvention, it’s about execution. The bank is simplifying its structure, refocusing on higher-return businesses, and building a cost base that supports consistent profitability. With the Investment Bank firing and retail lending stable, the foundation for sustainable growth is set. The next phase will hinge on whether Barclays can deliver RoTE north of 12% by 2026 while weathering rate cuts and modest UK growth.
For investors, the appeal lies in predictability. Barclays has proved it can generate mid-teens total returns through a combination of dividends, buybacks, and steady earnings, even without eye-catching upgrades. The shares trade at one of the lowest price-to-book multiples among large European banks, despite rising profitability and clear capital-return visibility. If management continues to execute with discipline, the rerating case becomes harder to ignore.
Should You Buy, Sell, or Hold Barclays?
Barclays looks pretty bullish, given improving fundamentals, generous capital returns, and management’s consistency, which gives the story credibility. But without upward revisions to guidance, the near-term catalysts may be limited. Still, a bank delivering 11% RoTE, a 5% dividend yield, and regular buybacks in a slow-growth market deserves more investor credit than it’s getting.
Long-term investors may find value in the stability that’s replacing volatility at Barclays. This is no longer a turnaround story, it’s a compounding one. Execution, not excitement, will drive returns from here.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
