One of the skyscrapers of Churchill Place, Barclays headquarters in Canary Wharf, London, UK, Thursday, January 7, 2021.
Bloomberg | Bloomberg | Getty Images
British lender Barclays on Wednesday raised its outlook and announced a 500 million pound ($667 million) share buyback in its third quarter results.
The bank said it expects full-year RoTE (return on tangible equity) to be around 11% to over 11%. The full-year outlook for net interest income (excluding investment banking and head office) has also been raised from more than £12.5bn to more than £12.6bn.
“Over the past nine quarters, we have generated strong and consistent capital for our shareholders,” Chief Executive Officer CS Venkatakrishnan said in a statement.
“As a result, we have decided to bring forward part of our full-year distribution plan with the £500m share buyback announced today. We will now move to announcing quarterly share buybacks. Our consistent and strong commitment has laid the foundations for an improved performance from 2026 onwards. We look forward to sharing our 2025 results as well as our updated targets for 2028.”
This comes despite pre-tax profits in the third quarter of £2.1bn, slightly below analysts’ expectations and down 7% on the same period in 2024.
Revenue for the quarter was £7.2bn, hurt by £235m of costs related to the UK car loan scandal. The charges against Barclays in connection with the case, which authorities say has exposed millions of consumers to the wrongful sale of car finance, amount to a total of £325m. Barclays also announced that it had taken a £110m impairment charge from a “single name” claimant.
Return on tangible equity for the quarter was 10.6%, down from 12.3% in the same period last year, while earnings per share were 10.4p.
Investment banking profits rose 8% year-on-year.
Strong earnings in the investment banking sector have helped lift European financial stocks this year, with the Stoxx 600 Bank Index up more than 55% through 2025 so far. Barclays’ share price has risen more than 35% since the beginning of the year.
Across the Atlantic, industry giants JPMorgan Chase & Co. and Goldman Sachs also reported better-than-expected third-quarter profits last week, with their results buoyed by better profits in their investment banking units.
The sector has been in the spotlight in the U.S. as Wall Street has grown concerned about possible bad loans. The worries extended to European bank stocks on Friday, but stocks quickly recovered on confidence that there were no systemic problems.
Barclays has a large presence in the United States, including investment banking, thanks to its acquisition of Lehman Brothers’ investment banking and capital markets division in 2008.
