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(Sharecast News) - UK bank Barclays delivered a better than expected 17% jump in half-year profits driven by higher income in its global markets division and investment banking fees.
Pre-tax profit for the six months to June 30 came in at 6bn, beating forecasts of 5.94bn, while group income increased 11% to 16.5bn boosted by higher structural hedge income and a one-off 225m gain from the sale of the American Airlines credit card portfolio. Barclays also announced a 1bn share buyback.
The bank said it remains on track to meet its 2026 and 2028 financial targets, upgrading its 2026 income goal to around 31.5bn. Net interest income excluding the investment bank and head office is now expected to exceed 13.7bn, reflecting continued balancesheet growth and hedge benefits.
Barclays announced 2.3bn of capital distributions for the first half, up 61% on last year. That includes a 1bn share buyback for Q2 and a 5.9p interim dividend, almost double the prior year's payout. Management reiterated its plan to return at least 10bn to shareholders between 2024 and 2026, with a preference for buybacks.
The group's CET1 ratio held at 14.3%, at the top of its 13-14% target range. After accounting for the new 1bn buyback, the ratio would be 14.0%, which Barclays said still provides comfortable headroom for regulatory changes and planned balancesheet growth.
Barclays UK delivered an 8% rise in income and a 20.1% RoTE, supported by loan growth and higher hedge income. Mortgage balances increased to 176.7bn, though margin compression and higher arrears nudged creditimpairment charges up to 338m.
The UK Corporate Bank posted 30% profit growth, with income up 8% and RoTE rising to 20.6%. Higher average deposit and lending balances supported net interest income, while credit impairments remained low.
Private Bank and Wealth Management saw income rise 2% but profit fall 21% as investment spending pushed the cost:income ratio to 73%. Client assets increased to 230bn, helped by market movements and deposit inflows.
The Investment Bank delivered 7.99bn of income, up 11%, with strong performances in equities, advisory and ECM. Profit before tax rose to 3.34bn, though impairments increased due to a 228m singlename charge. RoTE improved to 15.5%.
The US Consumer Bank benefited from the 225m gain on the AA portfolio sale and the Best Egg acquisition, lifting income 26% and RoTE to 24.2%. Underlying credit trends remained stable, with arrears broadly unchanged.
Looking ahead, Barclays expects to maintain a CET1 ratio within 13-14%, deliver a cost:income ratio in the high50s for 2026, and keep loanloss rates around the top of its 50-60bps throughthecycle range. Management said it remains "confident" in meeting all financial and distribution targets for both 2026 and 2028.
Reporting by Frank Prenesti for Sharecast.com