Barclays PLC (LON:BARC) has announced its 3rd quarter results.
Barclays delivered a return on tangible equity (RoTE) of 11.7% in Q326, announced a £500m share buyback, and is on track to deliver its 2026 and 2028 targets
C. S. Venkatakrishnan, Group Chief Executive, commented
“I am pleased with the ongoing momentum of Barclays’ operational and financial performance, with RoTE of 11.7% in Q326 and 13.8% year-to-date. Income of £7.4bn is up 3% from the same quarter last year. Our cost: income ratio has improved to 62% from 63%, profit before tax grew by 12% to £2.3bn, and our earnings per share (EPS) has increased 18%. With one quarter to go before the end of our original three-year plan, we have either achieved or are on track to achieve all of our 2026 Group targets. We are confident in and committed to the 2028 targets that we laid out earlier in the year. In Q326 we drove 7% year-on-year loan growth in our highest returning UK businesses1, with particular strength in UK Corporate Bank, up 14% year-on-year. The Investment Bank delivered strong Equities performance, offsetting a challenging environment for FICC. Our strong organic capital generation and common equity tier 1 (CET1) ratio of 14.2% means that we are in a position to announce a new £500m share buyback tranche today, bringing year-to-date distributions to £2.8bn, up 46% year-on-year.”
| Q326 Group RoTE of 11.7% (Q325: 10.6%) and Q326 YTD Group RoTE of 13.8% (Q325 YTD: 12.3%), on track to deliver greater than 12% in 2026 | |
| Q326 EPS of 12.3p, up 18% year-on-year and 43.0p in Q326 YTD, up 23% year-on-year | |
| UK loan growth of 7% year-on-year1, with UK Corporate Bank up 14% | |
| – | £28bn of the planned c.£30bn UK risk weighted assets (RWAs) growth delivered since 20242, of which £3bn was delivered in Q326 |
| Strong performance in Equities, with Q326 up 47% year-on-year, reflecting prior investment in Prime Financing and Equity Derivatives offset by a challenging environment for FICC (19% reduction year-on-year) | |
| Continued operational progress in US Consumer Bank reflecting growth across partnership cards, retail deposits, and originated loan balances through Best Egg | |
| Structurally reducing the cost base through expected technology-enabled FTE reductions, creating capacity for further investment in the business | |
| – | Q326 structural cost actions (SCAs) of £201m (Q325: £93m), with a further c.£300m planned in Q4263 |
| – | Group total costs expected to be c.£18.5bn in FY26 and c.£18.4bn in FY27 |
| Strong capital position and increased shareholder distributions | |
| – | CET1 ratio of 14.2% and announced intention to initiate a share buyback of up to £500m (Q325: £500m), bringing YTD announced distributions to £2.8bn, up 46% year-on-year |
| Greater capital flexibility following reduction in Pillar 2A requirements, alongside Basel 3.1 implementation | |
| – | RWAs expected to increase by £8-15bn on 1 January 2027, equivalent to a reduction in the CET1 ratio of 30-55bps |
| – | Expect 59bps reduction in the Pillar 2A requirement, lowering the MDA4 requirement from 12.2% to 11.6% |
Key financial metrics:
| RoTE | EPS | Cost: income ratio | LLR | Income | Profit before tax | Attributable profit | TNAV per share | CET1 ratio | Total capital return5 | |
| Q326 | 11.7% | 12.3p | 62% | 43bps | £7.4bn | £2.3bn | £1.6bn | 410p | 14.2% | £2.8bn |
| Q326 YTD | 13.8% | 43.0p | 57% | 55bps | £23.9bn | £8.4bn | £5.8bn |
Q326 Group Performance Highlights:
| Group RoTE increased to 11.7% (Q325: 10.6%), with profit before tax of £2.3bn (Q325: £2.1bn) | |
| Group income of £7.4bn increased 3% year-on-year | |
| – | Group net interest income (NII) excluding Barclays Investment Bank and Head Office was £3.5bn, up 7% year-on-year, driven by higher structural hedge income and continued lending momentum |
| – | Year-on-year NII growth across all operating divisions |
| Group cost: income ratio of 62% (Q325: 63%), with total operating expenses of £4.6bn, increased 1% year-on-year | |
| – | Group operating costs increased to £4.6bn (Q325: £4.3bn), reflecting business growth (including £65m related to changes in material risk taker (MRT) compensation mix), inflation and further investment spend (including £201m of Q326 SCAs, with £110m in Barclays UK), partially offset by c.£200m of cost efficiency savings |
| Credit impairment charges were £0.5bn, down 20% year-on-year, reflecting more normalised charges in the Investment Bank and US Consumer Bank. The loan loss rate (LLR) was 43bps (Q325: 57bps) | |
| 1 | UK loan growth comprises aggregate growth in loans and advances to customers across Barclays UK, UKCB and PBWM. |
| 2 | Represents RWAs from business growth in Barclays UK, UKCB and PBWM since January 2024, excluding the effects of securitisations, model updates and other methodological changes. Also excludes additional operational risk RWAs related to organic growth. |
| 3 | At H126 guided SCAs would be up to £0.5bn for H226, which is c.£0.3bn higher than usual annual SCA run-rate. |
| 4 | Maximum distributable amount. |
| 5 | Q326 YTD total capital return: includes the £500m buyback announced at Q126 Results, the £1.0bn buyback and c.£0.8bn dividend announced at H126 Results and the £500m buyback announced at Q326 Results. |
Q326 Business Performance Highlights
| Barclays UK RoTE was broadly stable at 21.2% (Q325: 21.8%) as income increased 4%, driven by higher structural hedge income supported by stable deposits deposit, offset by costs increasing 6% driven by £110m SCAs taken in Q326 |
| Barclays UK Corporate Bank (UKCB) RoTE increased to 23.5% (Q325: 22.8%) as income increased 10%, reflecting higher structural hedge income and higher average deposit and lending balances, partially offset by a cost increase of 10%, given the non-repeat of Q325 UK regulatory levies credit |
| Barclays Private Bank and Wealth Management (PBWM) RoTE decreased to 23.8% (Q325: 26.4%). Income growth was 10%, reflecting 6% higher client asset and liabilities balances year-on-year. Costs increased 18% reflecting ongoing investments in the wealth proposition |
| Barclays Investment Bank (IB) RoTE decreased to 9.5% (Q325: 10.1%). Income growth was 1% and lower impairment charge were more than offset by a 4% increase in costs including £57m Q326 SCAs and £55m MRT compensation mix, and higher average allocated tangible equity |
| Barclays US Consumer Bank (USCB) RoTE decreased to 10.9% (Q325: 13.5%) reflecting broadly stable income and 14% higher costs reflecting the Best Egg acquisition (Q326 first full quarter of Best Egg costs) |
Group financial targets and guidance1:
2026
| Returns: Group RoTE of greater than 12% | ||||
| Capital returns2: plan to return at least £10bn of capital to shareholders between 2024 and 2026, through dividends and share buybacks, with a continued preference for buybacks | ||||
| – | Progressive increase in total capital returns versus 2025 | |||
| – | Share buybacks announced quarterly | |||
| – | Dividends to be paid semi-annually, including planned £2bn dividend for 2026 | |||
| Income: Group total income of c.£31.5bn | ||||
| – | Group NII excluding IB and Head Office greater than £13.7bn and Barclays UK NII around the middle of the £8.1bn – £8.3bn guided range | |||
| Costs: Group cost: income ratio of high 50s in percentage terms and total costs of c.£18.5bn | ||||
| – | Run-rate costs in 2026 of c.£18.0bn which exclude additional SCAs of c.£0.3bn above normal annual run-rate, c.£0.1bn MRT compensation mix adjustments and c.£0.1bn Motor Finance provision booked in Q126 | |||
| Impairment: expect Group LLR to be around the top of the 50-60bps through the cycle range | ||||
| Capital: CET1 ratio target range of 13-14% | ||||
| – | IB RWAs mid 50s% of Group RWAs | |||
| – | Impact of regulatory change on RWAs in line with our prior guidance of c.£19-26bn | |||
| – | c.£8-15bn RWAs from Basel 3.1, with implementation expected from 1 January 20273 | |||
| – | Expect Pillar 2A CET1 requirement to reduce by 59bps upon implementation, reducing MDA to 11.6% | |||
| – | c.£11bn RWAs from USCB moving to an Internal Ratings Based (IRB) model, subject to portfolio changes and regulatory approval, expected in H2 2027 | |||
| – | Expect minimal change in Pillar 2A requirement upon model implementation | |||
2027
| Costs: Group costs of c.£18.4bn and Barclays UK cost: income ratio of high 40s% |
2028
| Returns: Group RoTE of greater than 14% | |
| Capital returns2: plan to return greater than £15bn of capital to shareholders between 2026 and 2028, through dividends and share buybacks. This provides capacity for additional investment and growth, exceeding the level of investment in the current plan | |
| Income: greater than 5% compound annual growth rate (CAGR) 2025-2028 | |
| Costs: Group cost: income ratio of low 50s in percentage terms. Cost target includes total gross efficiency savings of greater than £2bn in 2026-2028 | |
| Impairment: expect Group LLR of 50-60bps through the cycle | |
| Capital: CET1 ratio target range of 13-14% | |
| – | IB RWAs of c.50% of Group RWAs |
| 1 | Targets and guidance are based on management’s current expectations as to the macroeconomic environment and the business and may be subject to change. |
| 2 | This multi-year plan is subject to supervisory and Board approvals, anticipated financial performance and our published CET1 ratio target range of 13-14%. |
| 3 | Fundamental review of the trading book (FRTB) impact mostly expected in 2027. |
