In a significant financial announcement, Barclays has revealed a robust performance for the 2025 financial year, with pre-tax profits climbing by an impressive 13 per cent to reach £9.1 billion. This figure notably surpassed analyst expectations, which had been set at around £9 billion, underscoring the bank's stronger-than-anticipated operational success.
Substantial Shareholder Returns Unveiled
Accompanying these profit figures, the FTSE 100 banking giant has launched a fresh £1 billion share buyback programme. More broadly, Barclays has outlined ambitious plans to return a total of £15 billion to its shareholders between 2026 and 2028. This substantial return will be delivered through a combination of dividends and further share buybacks, as the bank pursues its goal of delivering sustainable high returns over the medium term.
The total returns to shareholders for 2025, including this latest buyback initiative, amounted to £3.7 billion. This represents a substantial 23 per cent increase compared to the returns distributed in the previous year, 2024.
Investment Banking Restructure and Performance
The announcement follows confirmation from chief executive CS Venkatakrishnan, commonly known as Venkat, that the bank successfully achieved all its financial targets for the year. A key focus under Venkat's leadership has been the restructuring of the bank's investment banking division.
The powerhouse investment arm delivered £13.1 billion in revenue during 2025, accounting for 45 per cent of the group's total revenue of £29.1 billion. As part of the restructuring efforts, Barclays is committed to reducing the proportion of group risk-weighted assets held by the investment bank from 58 per cent to a leaner 50 per cent by 2026. Progress is evident, with the division's share of risk-weighted assets falling to 55.1 per cent, although work remains to hit the target.
Cost management has been a priority, with the investment bank's cost-to-income ratio—a critical metric of financial efficiency—improving to 62 per cent, down from 67 per cent previously.
Strategic Focus on AI and Efficiency
Looking ahead, Barclays is placing a strong strategic emphasis on artificial intelligence to drive future efficiencies. CEO Venkatakrishnan has outlined plans to utilise AI as a core component in delivering £2 billion of cost savings over the coming three years. He described AI as an empowering technology for employees, equipping them for a new technological age.
The bank maintains a focus on headcount objectives and is working on improving and harmonising its legacy technology systems to support this digital transformation. This move comes as analysts, including those from UBS, highlight the increasing pressure on financial institutions to articulate a clear and coherent strategy for AI implementation, detailing current expenditures and the anticipated impact on future expenses and staffing levels.
Barclays is targeting a return on tangible equity—a key profitability measure relative to shareholder equity—of above 14 per cent. Reflecting on the bank's trajectory, Venkat stated that the progress made over the past two years provides a solid foundation to deliver enhanced value for customers, clients, and shareholders in the years to come.
