Shares in Barclays (BARC) gained 2% to 497p after the bank promised to return more than £15 billion in capital. Positive Q4 and FY results and an improved FY26 outlook also helped lift the stock out of its recent ‘fug’.
| Share price: 497p (+2%) | PE: 11.4x |
| Market cap: £67.1bn | Yield: 1.9% |
Big returns in prospect
For the fourth quarter, Barclays reported income of £7.1 billion, up 2% on the previous year. Its investment bank, which is the largest non-US player, posted income of $2.79 billion, beating market forecasts of $2.74 billion.
For FY25, the bank reported income of £29.1 billion, an increase of 9% on the previous year. Investment banking income rose 11%, while UK corporate banking income rose 16% and retail income rose 5%.
For this year, the bank nudged up its income forecast from £30 billion to £31 billion. It also raised its Return on Total Equity target, a key measure of profitability, to 12% against 11.3% last year.
Through to 2028, Barclays sees income growth of over 5% per year and an ROTE of more than 14%. It also forecast more than £15 billion of shareholder returns through dividends and share buybacks.
The bank’s progress ‘provides a strong foundation to deliver more for our customers, clients and shareholders’, said CEO C.S. Venkatakrishnan. He added: ‘Our aim is to secure sustainably higher returns through to 2028 and beyond.’
We’re curious as to why investors haven’t responded more positively to today’s update from Barclays. The prospect of £15 billion of returns – or around 22% of its market cap – is surely worth celebrating properly?
It may be that the 2026 ROTE target of 12% undershot some analysts’ expectations. Other than that, the outlook seems fine – anyway, it’s always better to under-promise and over-deliver than vice versa.
Read the press release here: https://home.barclays/investor-relations/
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