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Barclays PLC on Wednesday announced an accelerated share buyback, and raised its return on tangible equity guidance, despite increasing provisions for motor finance mis-selling. In response, shares in the London-based lender were 2.9% higher at 374.80 pence each in London on Wednesday morning. The wider FTSE 100 index was up 0.7%. Barclays said it had brought forward a portion of its full-year distribution plans, starting a new £500 million share buyback. Going forward, Barclays plans for quarterly buyback announcements. The target remains to return at least £10 billion of capital to shareholders between 2024 and 2026, Barclays said. The bank reported a 6.9% decline in pretax profit to £2.08 billion in the quarter to September from £2.23 billion a year earlier, below Visible Alpha consensus of £2.15 billion. This includes an additional £235 million charge for UK motor finance redress, lifting its total provision to £325 million from £90 million. Barclays said the resulting charge reflects the increased likelihood of a higher number of motor finance cases falling within the scope of the scheme proposed by the UK Financial Conduct Authority, and the likelihood of a higher than anticipated level of customer redress reflecting the regulator’s proposed methodology. Total income rose 9.5% to £7.17 billion from £6.55 billion a year ago, ahead of £7.04 billion VA consensus, supported by broad-based growth across divisions. Income in Barclays UK increased 16%, boosted by the Tesco Bank acquisition, while the UK Corporate Bank grew 17%. Income rose by 8% at the Investment Bank, 3% in the Private Bank & Wealth Management division, and 19% in the US Consumer Bank. Operating costs rose 7.6% to £4.25 billion from £3.95 billion, with a cost income ratio of 63%, climbing from 61%. Credit impairment charges rose to £632 million from £374 million, and total litigation and conduct costs climbed to £255 million from £35 million. Return on tangible equity stood at 10.6% in the quarter and 12.3% year-to-date. Barclays upgraded its 2025 RoTE guidance to above 11% and reaffirmed its 2026 target of greater than 12%. In 2024, the bank reported RoTE of 10.5%. ‘This is driven by a stronger outlook for stable income and an earlier than planned delivery of efficiency savings,’ said Chief Executive CS Venkatakrishnan. The CEO said Barclays will share updated targets to 2028 alongside full-year results. In addition, expectations for 2025 net interest income, excluding Barclays Investment Bank and Head Office, were upgraded to greater than £12.6 billion from greater than £12.5 billion previously. Of this, the firm expects Barclays UK NII of greater than £7.6 billion. In 2024, Barclays reported NII of £12.94 billion. Its common equity tier 1 ratio was 14.1% at September 30, compared to 13.6% at the end of 2024. Copyright 2025 Alliance News Ltd. All Rights Reserved.
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