Barclays(BCS) - 2025 Q2 - Quarterly Report

Performance Highlights This section provides an overview of the Group's financial performance, capital position, and strategic targets for H1 2025 and Q2 2025 H125 and Q225 Performance Highlights Barclays reported strong H1 2025 results with a 13.2% RoTE, £14.9 billion income, and robust capital, on track for 2026 targets Key Financial Metrics for H125 and Q225 | | Income | Profit before tax | Attributable profit | Cost: income ratio | LLR | RoE | RoTE | EPS | CET1 ratio | Total capital return | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Q225 | £7.2bn | £2.5bn | £1.7bn | 59% | 44bps | 10.7% | 12.3% | 11.7p | 14.0% | £1.4bn | | H125 | £14.9bn | £5.2bn | £3.5bn | 58% | 52bps | 11.4% | 13.2% | 24.7p | | | - The Group delivered a Return on Tangible Equity (RoTE) of 13.2% for H125 and 12.3% for Q225, with Earnings Per Share (EPS) improving to 24.7p for the half-year compared to 18.6p in H124[22] - Total capital returns for H125 include a completed £1bn share buyback and a newly announced buyback of up to £1bn, plus a dividend of 3.0p per share[22] - The CET1 ratio stood strong at 14.0% After accounting for the newly announced £1bn share buyback, the pro-forma CET1 ratio would be 13.7%, which is within the target range of 13-14%[22] 2025 Guidance and 2026 Targets | Metric | 2025 Guidance | 2026 Targets | | :--- | :--- | :--- | | RoTE | c.11% | > 12% | | Capital Returns | Progressive increase vs 2024 | Plan to return at least £10bn (2024-2026) | | Group NII (excl. IB & HO) | > £12.5bn | - | | Group Total Income | - | c.£30bn | | Cost: Income Ratio | c.61% | High 50s % | | Gross Efficiency Savings | c.£500m | c.£2bn by 2026 | | Impairment (LLR) | 50-60bps (through the cycle) | 50-60bps (through the cycle) | | CET1 Ratio | 13-14% target range | 13-14% target range | Group Finance Director's Review This section provides the Group Finance Director's detailed commentary on overall financial performance, capital, and liquidity Group Performance, Capital, and Liquidity Barclays achieved £5.2 billion profit before tax and 13.2% RoTE in H1 2025, with strong capital and liquidity - Group statutory income increased 12% to £14.9bn, driven by higher income in Global Markets, structural hedge income, and the Tesco Bank acquisition[37] - The CET1 ratio increased by approximately 50bps to 14.0% from 13.6% at year-end 2024 This was driven by a c.100bps increase from attributable profit, partially offset by a c.50bps decrease from shareholder distributions[37] - The Group's liquidity position remains strong, with the liquidity pool increasing to £333.7bn from £296.9bn at year-end 2024, and the average LCR rising to 177.7%[37] - Key strategic developments in H125 include the completion of the sale of the German consumer finance business, which released c.£3.3bn of RWAs, and entering a long-term strategic partnership with Brookfield for the Payment Acceptance business[39] - The provision for motor finance matters remained unchanged in H125, but the ultimate financial impact remains uncertain pending legal and regulatory outcomes[39] Results by Business This section provides a detailed breakdown of the financial performance and key metrics for each of the Group's business segments Barclays UK Barclays UK reported £1.6 billion profit before tax in H1 2025, with 18.6% RoTE, driven by income growth Barclays UK H125 Performance | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total income | £4,193m | £3,713m | 13% | | Profit before tax | £1,601m | £1,539m | 4% | | Attributable profit | £1,090m | £1,063m | 3% | | RoTE | 18.6% | 20.4% | | - Total income growth was driven by a 17% increase in Net Interest Income (NII) to £3.7bn, benefiting from structural hedge momentum and the Tesco Bank acquisition, which offset pressure from retail deposit dynamics[51] - Credit impairment charges rose to £237m from £66m in H124, reflecting the impact of the Tesco Bank acquisition and a normalization from the prior year which benefited from an improved macroeconomic outlook[51] - Loans and advances increased by £3.5bn to £211.2bn, driven by growth in mortgages and cards lending, while customer deposits decreased by £2.9bn to £241.3bn[51] Barclays UK Corporate Bank Barclays UK Corporate Bank achieved 16.8% RoTE in H1 2025, with profit before tax increasing 18% to £435 million Barclays UK Corporate Bank H125 Performance | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total income | £1,003m | £877m | 14% | | Profit before tax | £435m | £368m | 18% | | Attributable profit | £284m | £248m | 15% | | RoTE | 16.8% | 16.6% | | - Net Interest Income (NII) increased by 22% to £701m, driven by higher average deposit and lending balances, along with higher structural hedge income[54] - Total operating expenses rose 10% to £537m, mainly due to a £39m litigation and conduct charge Operating costs increased 4% reflecting investment spend[54] - Loans and advances grew to £27.9bn from £25.4bn at year-end 2024, reflecting a strategic focus on growing customer lending[54] Barclays Private Bank and Wealth Management PBWM achieved a strong 33.2% RoTE in H1 2025, with profit before tax increasing 18% to £234 million PBWM H125 Performance | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total income | £697m | £632m | 10% | | Profit before tax | £234m | £199m | 18% | | Attributable profit | £184m | £151m | 22% | | RoTE | 33.2% | 29.7% | | - Income growth was driven by higher deposit, invested asset, and loan balances from net new inflows and market movements, along with increased transactional activity[58] - Client assets and liabilities increased by £4.5bn to £213.4bn compared to year-end 2024, driven by growth in invested assets[58] Barclays Investment Bank The Investment Bank delivered a strong 14.2% RoTE in H1 2025, with profit before tax up 25% to £3.0 billion Barclays Investment Bank H125 Performance | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total income | £7,180m | £6,347m | 13% | | Profit before tax | £3,010m | £2,411m | 25% | | Attributable profit | £2,075m | £1,614m | 29% | | RoTE | 14.2% | 10.8% | | H125 Income by Business Line | Business Line | H1 2025 Income (£m) | H1 2024 Income (£m) | % Change | | :--- | :--- | :--- | :--- | | Global Markets | 4,982 | 4,132 | 21% | | FICC | 3,149 | 2,553 | 23% | | Equities | 1,833 | 1,579 | 16% | | Investment Banking | 2,198 | 2,215 | (1%) | | Banking fees & underwriting | 1,212 | 1,296 | (6%) | | International Corporate Bank | 986 | 919 | 7% | - Global Markets income increased 21% to £5.0bn, with FICC up 23% due to strong performance in Macro and Credit, and Equities up 16% reflecting growth in Prime and Derivatives[64] - RWAs decreased to £196.4bn from £198.8bn at year-end 2024, mainly driven by the strengthening of GBP against USD, which partially offset higher client and trading activity[64] Barclays US Consumer Bank The US Consumer Bank achieved 7.3% RoTE in H1 2025, with profit before tax increasing 7% to £170 million Barclays US Consumer Bank H125 Performance | Metric | H1 2025 | H1 2024 | % Change | | :--- | :--- | :--- | :--- | | Total income | £1,687m | £1,678m | 1% | | Profit before tax | £170m | £159m | 7% | | Attributable profit | £128m | £119m | 8% | | RoTE | 7.3% | 7.2% | | - On a constant currency basis (USD), total income was up 7% year-on-year[23] - Credit quality remained stable, with US cards 30-day arrears at 2.8% (H124: 2.9%) and 90-day arrears at 1.6% (H124: 1.6%)[71] - RWAs decreased to £24.7bn from £26.8bn at year-end 2024, driven by seasonality and the strengthening of GBP against USD[71] Head Office Head Office reported a reduced loss before tax of £247 million in H1 2025, an improvement from H1 2024 Head Office H125 Performance | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Total income | £136m | £30m | | Loss before tax | (£247m) | (£461m) | | Attributable loss | (£238m) | (£408m) | - The improved performance was largely due to the non-recurrence of a prior year loss on the sale of the Italian retail mortgage portfolio and lower litigation and conduct charges[75] - RWAs decreased to £12.6bn from £16.2bn at year-end 2024, primarily driven by the disposal of the German consumer finance business[74] Quarterly Results Summary This section provides a high-level overview of the Barclays Group's quarterly financial performance and key metrics Barclays Group Quarterly Results This section summarizes Barclays Group's quarterly financial performance and key metrics from Q3 2023 to Q2 2025 Barclays Group Quarterly Performance (Q224 vs Q225) | Metric | Q225 | Q224 | | :--- | :--- | :--- | | Total income | £7,187m | £6,324m | | Profit before tax | £2,484m | £1,938m | | Attributable profit | £1,659m | £1,237m | | RoTE | 12.3% | 9.9% | | Cost: income ratio | 59% | 63% | | Loan loss rate (bps) | 44 | 38 | | CET1 ratio | 14.0% | 13.6% | Quarterly Results by Business This section presents the quarterly financial performance and key metrics for each of Barclays' individual business segments Quarterly Results - Barclays UK This section details Barclays UK's quarterly financial performance, including income and credit impairment charges by sub-segment Barclays UK Quarterly Performance (Q224 vs Q225) | Metric | Q225 | Q224 | | :--- | :--- | :--- | | Total income | £2,119m | £1,887m | | Profit before tax | £845m | £834m | | RoTE | 19.7% | 22.3% | | Loan loss rate (bps) | 14 | 1 | Quarterly Results - Barclays UK Corporate Bank This section details Barclays UK Corporate Bank's quarterly financial results, including income by segment and key performance metrics Barclays UK Corporate Bank Quarterly Performance (Q224 vs Q225) | Metric | Q225 | Q224 | | :--- | :--- | :--- | | Total income | £519m | £443m | | Profit before tax | £228m | £200m | | RoTE | 16.6% | 18.0% | | Loan loss rate (bps) | 17 | 12 | Quarterly Results - Barclays Private Bank and Wealth Management This section provides a quarterly breakdown of Barclays Private Bank and Wealth Management's financial performance and key metrics PBWM Quarterly Performance (Q224 vs Q225) | Metric | Q225 | Q224 | | :--- | :--- | :--- | | Total income | £348m | £320m | | Profit before tax | £112m | £104m | | RoTE | 31.9% | 30.8% | | Client assets and liabilities | £213.4bn | £198.5bn | Quarterly Results - Barclays Investment Bank This section details the Barclays Investment Bank's quarterly performance, including income breakdown by Global Markets and Investment Banking Barclays Investment Bank Quarterly Performance (Q224 vs Q225) | Metric | Q225 | Q224 | | :--- | :--- | :--- | | Total income | £3,307m | £3,019m | | Profit before tax | £1,300m | £1,072m | | RoTE | 12.2% | 9.6% | | Global Markets Income | £2,320m | £1,845m | Quarterly Results - Barclays US Consumer Bank This section outlines the Barclays US Consumer Bank's quarterly financial results, including income, profit, and key performance metrics Barclays US Consumer Bank Quarterly Performance (Q224 vs Q225) | Metric | Q225 | Q224 | | :--- | :--- | :--- | | Total income | £823m | £819m | | Profit before tax | £115m | £100m | | RoTE | 10.2% | 9.2% | | Loan loss rate (bps) | 456 | 438 | Quarterly Results - Head Office This section details the Head Office segment's quarterly financial results, including income, loss, and Risk Weighted Assets Head Office Quarterly Performance (Q224 vs Q225) | Metric | Q225 | Q224 | | :--- | :--- | :--- | | Total income | £71m | (£164m) | | Loss before tax | (£116m) | (£372m) | | Attributable loss | (£114m) | (£349m) | | Risk weighted assets | £12.6bn | £18.3bn | Performance Management This section focuses on key performance indicators, including net interest margins and the impact of the structural hedge program Margins and Balances The Group's Net Interest Margin (NIM) increased to 4.50% in H1 2025, driven by structural hedge and Tesco Bank acquisition Net Interest Margin (Group excluding IB and Head Office) | Period | Net Interest Margin (%) | | :--- | :--- | | H1 2025 | 4.50 | | H1 2024 | 4.16 | | Q2 2025 | 4.48 | | Q1 2025 | 4.51 | | Q4 2024 | 4.50 | | Q3 2024 | 4.29 | | Q2 2024 | 4.20 | Structural Hedge The structural hedge program stabilizes NIM on stable balance sheet items, contributing £2.8 billion in H1 2025 - The structural hedge program is designed to stabilize NIM on items like non-interest-bearing current accounts and equity by using interest rate swaps to create a more certain fixed-income stream[98][99] - The Group has external derivatives designated as cash flow hedges with a net notional value of £112.5bn, reflecting a structural hedge notional of £232.4bn netted with non-structural positions[104] - Gross structural hedge contributions increased to £2,778m in H125, compared to £2,222m in H124[105] Risk Management This section outlines the Group's comprehensive risk management framework, principal risks, and detailed analysis of credit, market, and treasury risks Risk Management and Principal Risks The Group's risk management is governed by the ERMF, identifying ten principal risks with no significant changes in H1 2025 - The Enterprise Risk Management Framework (ERMF) defines the Group's process for identifying principal risks and setting risk appetite[107] - The ten principal risks identified are credit, market, treasury and capital, climate, operational, model, compliance, financial crime, reputation, and legal risk No significant changes to these risks were reported in H125[108] Credit Risk The Group's credit risk profile shows £352.8 billion in loans, a 52bps loan loss rate, and stable arrears across portfolios Total Loans and Advances at Amortised Cost (30.06.25) | Metric | Gross Exposure (£m) | Impairment Allowance (£m) | Coverage Ratio (%) | | :--- | :--- | :--- | :--- | | Total | 352,774 | 4,946 | 1.4 | - The annualised loan loss rate for the Group was 52bps for H125[115] - Management adjustments to impairment models totaled £167m This includes a new economic uncertainty adjustment of £87m (£70m net of credit protection) introduced during the year to reflect heightened uncertainty in the US macroeconomic outlook[140][146] - UK home loan 90-day arrears remained low and stable at 0.2%, while new lending increased significantly to £15.4bn in H125 from £9.2bn in H124[192][194] - US cards 30-day arrears decreased to 2.8% (from 3.0% at YE24) and 90-day arrears were stable at 1.6%, in line with seasonal expectations[200] Market Risk The Group's average management Value at Risk (VaR) decreased 21% to £19 million in H1 2025 due to prudent positioning Management VaR (95%) by Asset Class | (£m) | Average H125 | High H125 | Low H125 | Average H224 | | :--- | :--- | :--- | :--- | :--- | | Credit risk | 16 | 20 | 13 | 20 | | Interest rate risk | 15 | 25 | 5 | 14 | | Equity risk | 8 | 14 | 5 | 5 | | Total management VaR | 19 | 30 | 10 | 24 | - Average Management VaR decreased 21% to £19m in H125 from £24m in H224, due to reduced leverage loan exposure and prudent risk positioning[208] Treasury and Capital Risk The Group maintained a strong capital position in H1 2025, with CET1 at 14.0% and robust liquidity Key Capital and Liquidity Ratios (as at 30.06.25) | Ratio | Value | | :--- | :--- | | CET1 Ratio | 14.0% | | Tier 1 Ratio | 17.8% | | Total Capital Ratio | 20.5% | | MREL Ratio | 35.4% | | UK Leverage Ratio | 5.0% | | Liquidity Coverage Ratio (LCR) | 177.7% (average) | | Net Stable Funding Ratio (NSFR) | 135.6% (average) | - CET1 capital increased by £1.0bn to £49.5bn, primarily due to £1.9bn of net capital generation from earnings, which offset a £1.3bn decrease in other qualifying reserves (mainly currency translation)[241][242] - RWAs decreased by £5.1bn to £353.0bn, driven by a £8.8bn reduction from FX movements and a £3.3bn decrease from the disposal of the German consumer finance business, partially offset by an £8.3bn increase from business growth[243][244][245] - The Group's liquidity pool increased by £36.8bn to £333.7bn from year-end 2024[220] Condensed Consolidated Financial Statements This section presents the Group's condensed consolidated income statement, balance sheet, and cash flow statement for H1 2025 Financial Statements Overview The H1 2025 consolidated financial statements show £4.0 billion profit after tax and increased total assets and equity H125 Income Statement Summary | Metric | H1 2025 (£m) | H1 2024 (£m) | | :--- | :--- | :--- | | Total income | 14,896 | 13,277 | | Profit before tax | 5,203 | 4,215 | | Profit after tax | 4,030 | 3,323 | | Attributable profit (to shareholders) | 3,523 | 2,787 | | Basic EPS | 24.7p | 18.6p | Balance Sheet Summary | Metric | As at 30.06.25 (£m) | As at 31.12.24 (£m) | | :--- | :--- | :--- | | Total assets | 1,598,700 | 1,518,202 | | Total liabilities | 1,522,345 | 1,445,721 | | Total equity | 76,355 | 72,481 | - Total comprehensive income for H125 was £4.9 billion, a significant increase from £2.3 billion in H124, boosted by a £1.7 billion positive movement in the cash flow hedging reserve[254] Financial Statement Notes This section provides detailed notes to the financial statements, covering accounting policies, fair value measurements, and provisions for legal matters Key Accounting Policies and Segmental Reporting Interim financial statements follow IAS 34, with consistent accounting policies and detailed segmental reporting of financial performance - The financial statements are prepared on a going concern basis, with directors satisfied that the Group has adequate resources to continue in business for at least 12 months[274] H125 Profit/(Loss) Before Tax by Segment | Segment | PBT (£m) | | :--- | :--- | | Barclays UK | 1,601 | | Barclays UK Corporate Bank | 435 | | Barclays Private Bank and Wealth Management | 234 | | Barclays Investment Bank | 3,010 | | Barclays US Consumer Bank | 170 | | Head Office | (247) | | Barclays Group | 5,203 | Fair Value of Financial Instruments The Group held £763.3 billion in fair value assets, with Level 3 instruments totaling £23.9 billion, subject to sensitivity Assets and Liabilities at Fair Value by Hierarchy (30.06.25) | (£m) | Level 1 | Level 2 | Level 3 | Total | | :--- | :--- | :--- | :--- | :--- | | Total assets | 120,120 | 619,283 | 23,919 | 763,322 | | Total liabilities | (41,275) | (604,758) | (6,133) | (652,166) | - The net balance of Level 3 instruments (assets minus liabilities) was £17.8 billion as of June 30, 2025[300] - Sensitivity analysis on Level 3 instruments shows a potential valuation impact ranging from a £1,188m increase to a £1,249m decrease, primarily affecting the income statement[308] Provisions, Contingent Liabilities, and Legal Matters Total provisions were £1.36 billion, with ongoing uncertainty in motor finance and various legal and regulatory matters - Total provisions were £1,364m, with the largest components being for undrawn facilities (£425m), sundry provisions (£364m), and customer redress (£295m)[320] - The motor finance provision was reassessed at 30 June 2025 with no material adjustment made However, the ultimate financial impact remains uncertain and could be materially different from the amount provided[323] - The Group settled with the UK FCA in two separate investigations concerning financial crime systems and controls for a total of £48m (£39m for Barclays Bank PLC and £9m for Barclays Bank UK PLC)[39][381] - Barclays continues to face various civil actions related to alleged manipulation of LIBOR, foreign exchange, and metals prices, with some cases settled and others under appeal[347][353][355] Appendix: Non-IFRS Performance Measures This appendix provides reconciliations of key non-IFRS performance measures, such as RoTE and TNAV per share, to IFRS equivalents Reconciliation of Non-IFRS Measures This appendix reconciles key non-IFRS measures like RoTE and TNAV per share to IFRS, aiding consistent performance assessment Group RoTE Reconciliation (H125) | Metric | Value (£bn) | | :--- | :--- | | Attributable profit | 3.523 | | Average equity | 61.8 | | Less: Average goodwill and intangibles | (8.3) | | Average tangible equity | 53.5 | | RoTE | 13.2% | TNAV per Share Reconciliation (30.06.25) | Metric | Value (£m) | | :--- | :--- | | Shareholders' equity | 62,640 | | Less: Goodwill and intangibles | (8,186) | | Tangible shareholders' equity | 54,454 | | Shares in issue (m) | 14,180 | | TNAV per share | 384p | - Reconciliations are also provided for operating costs (excluding UK regulatory levies and litigation/conduct) and Group Net Interest Income (excluding the Investment Bank and Head Office)[406] Appendix: Loan Loss Rate Calculations This appendix provides detailed calculations and quarterly trends of the Loan Loss Rate (LLR) for the Group and its business segments LLR by Business and Quarter This appendix details the Loan Loss Rate (LLR) calculations for the Group and its segments, including quarterly trends Loan Loss Rate (bps) by Segment - H125 vs H124 | Segment | H1 2025 LLR (bps) | H1 2024 LLR (bps) | | :--- | :--- | :--- | | Barclays UK | 21 | 6 | | Barclays UK Corporate Bank | 22 | 18 | | Barclays Private Bank & Wealth Management | (15) | (4) | | Barclays Investment Bank | 22 | 6 | | Barclays US Consumer Bank | 523 | 509 | | Barclays Group | 52 | 45 | Group Quarterly Loan Loss Rate (bps) | Quarter | Q225 | Q125 | Q424 | Q324 | Q224 | | :--- | :--- | :--- | :--- | :--- | :--- | | LLR (bps) | 44 | 61 | 66 | 37 | 38 | Shareholder Information This section provides essential information for shareholders, including dividend timetables and contact details Key Dates and Contact Information This section provides essential shareholder information, including the H1 2025 dividend timetable and contact details H1 2025 Dividend Timetable | Event | Date | | :--- | :--- | | Ex-dividend date | 7 August 2025 | | Dividend record date | 8 August 2025 | | Dividend payment date | 16 September 2025 | - The H1 2025 dividend is 3.0p per ordinary share[288] Glossary of Terms This section provides definitions for a wide range of financial, regulatory, and business-specific terms used in the report Definitions This extensive glossary defines financial, regulatory, and business-specific terms used throughout the results announcement