Barclays' annual profit rises as bank aims to hand £15bn to shareholders
Barclays has revealed it made £1bn more in profits last year as it was boosted by corporate and investment banking activity and an ongoing cost-cutting drive.
The banking giant generated a pre-tax profit of £9.1bn for 2025, a 13 per cent increase on the £8.1bn made in 2024.
Income from all its divisions increased, with total group income jumping by 9 per cent year-on-year.
This soared to 16 per cent for its corporate bank, with firms both depositing more cash and borrowing more, and 11 per cent for the investment bank, as activity in the global financial markets accelerated.
Barclays said it wants to hand out more than £15bn to shareholders between 2026 and 2028 through dividends and share buybacks.
Meanwhile, the bank told investors it had made cost savings worth £700m during 2025, bringing the total to £1.7bn over two years.
It falls slightly short of the sweeping £2bn savings target that the bank set itself at the beginning of 2024, to achieve this year.
Nevertheless, total costs for the group increased by 5 per cent last year, partly due to the acquisition of Tesco Bank.
It also reflects the bank setting aside an additional £235m to cover the estimated cost of compensating motor finance customers under the financial regulator’s proposed redress scheme – bringing the total provision to £325m.
Barclays said it considers it “more likely than not” that the compensation scheme will be implemented by the Financial Conduct Authority (FCA), which is expected to be set out this month or next.
Chief executive CS Venkatakrishnan said: “Our progress in the past two years provides a strong foundation to deliver more for our customers, clients and shareholders.”
“As we outline in our plan for the next three years, we will invest further to improve customers’ experience and deepen relationships, while harnessing new technology, including AI, to improve efficiency and build segment-leading businesses and drive further growth.”
Victoria Scholar, Head of Investment, interactive investor said: “Barclays reported full year profit before tax of £9.1bn, up 12 per cent year-on-year, very slightly ahead of analysts’ expectations.
She added: "The more recent strength of the US dollar against sterling is something of a double-edged sword – Barclays noted dollar weakness adversely impacted income and profits but positively impacted credit impairment charges and operating expenses.
“The group has had a good run of late, and the shares have risen by around 60 per cent over the last year supported by the higher for longer interest rate backdrop and solid returns to shareholders. Shares are responding mildly positively to today’s announcement.
“Barclays remains the preferred play in the UK banking sector by some distance.”