Barclays(US:BCS)2026-02-10 17:37Financial Performance - Barclays achieved a return on tangible equity (RoTE) of 11.3% in FY25, up from 10.5% in FY24, with earnings per share (EPS) increasing by 22% to 43.8p[19][22]. - Group profit before tax increased to £9.1bn in FY25, up 13% from £8.1bn in FY24, with a RoTE of 11.3% compared to 10.5% in FY24[32]. - Group income rose by 9% year-on-year to £29.1bn, with net interest income (NII) excluding Investment Banking and Head Office increasing by 13% to £12.8bn[28]. - Attributable profit was £6,175m, up from £5,316m in the previous year[35]. - Profit before tax decreased 5% to £3,413m[43]. - Profit before tax for Barclays Investment Bank increased 22% to £4,614m[55]. - Profit before tax for Q425 was £1,859m, down from £2,077m in Q325, reflecting a decrease of 10.6%[70]. Capital Distribution - Total capital distributions for FY25 amounted to £3.7 billion, a 23% increase from £3.0 billion in FY24, including a £1.0 billion share buyback[19][22]. - Barclays is targeting a RoTE of greater than 14% by 2028 and plans to distribute over £15 billion in capital to shareholders between 2026 and 2028[19][20]. - The company plans to return at least £10bn of capital to shareholders between 2024 and 2026, with a preference for share buybacks[29]. Cost Management - The cost-to-income ratio improved to 61% in FY25, down from 62% in FY24, reflecting ongoing cost discipline and operational efficiency[22]. - Barclays achieved £0.7 billion in cost efficiency savings in FY25, surpassing the guidance of approximately £0.5 billion[22]. - Total operating expenses for FY25 were £17.7 billion, reflecting a 6% year-on-year increase[24]. - Total operating costs increased by 5% to £17.0bn, reflecting business growth and inflation, partially offset by £0.7bn in cost efficiency savings[28]. - Total operating expenses rose to £17,745m, reflecting a 5% increase in operating costs to £17,040m, with £700m in cost efficiency savings[35]. Asset Quality and Impairment - The group reported a loan loss rate (LLR) of 52 basis points for FY25, compared to 46 basis points in FY24, remaining within the target range of 50-60 basis points[22]. - Credit impairment charges were £2.3bn, up from £2.0bn in FY24, with a loan loss rate (LLR) of 52bps compared to 46bps in FY24[28]. - Credit impairment charges increased to £305m from £123m in FY24, primarily due to a single name charge and macroeconomic uncertainty[60]. - The annualised loan loss rate was 52 basis points after a total impairment charge of £2.279 billion[112]. Capital Ratios - The common equity tier 1 (CET1) ratio stood at 14.3% as of December 31, 2025, which would adjust to 14.0% after accounting for the announced share buyback[19][22]. - CET1 ratio improved to 14.3% from 13.6% in December 2024, with risk-weighted assets (RWAs) at £356.8bn[28]. - The CET1 ratio increased to 14.3%, with a £2.5bn increase in CET1 capital to £51.1bn[35]. - The common equity tier 1 ratio improved to 14.3% in Q425, compared to 14.1% in Q325, indicating a stronger capital position[70]. Income Growth - Barclays UK Corporate Bank income grew by 16% to £2.1bn, driven by higher average deposit and lending balances[28]. - Group total income target for FY26 is approximately £31bn, with NII excluding Investment Banking and Head Office expected to exceed £13.5bn[29]. - Total income increased 5% to £8,708m, with net interest income (NII) rising 15% to £7,653m[43]. - Total income for Barclays UK Corporate Bank increased 16% to £2,064m[46]. - Total income increased by 11% to £13,055m, driven by strong performance in Global Markets and International Corporate Bank[58]. Economic Outlook - UK GDP is projected to grow by 1.5% in 2025, with a slight decline to 1.1% in 2026[156]. - US GDP is expected to remain stable at 2.0% from 2026 to 2029[156]. - UK unemployment rate is forecasted to rise to 4.9% in 2026, peaking at 4.8% in 2027[156]. - US unemployment rate is anticipated to increase to 4.5% in 2026, with a gradual decline to 4.4% by 2029[156]. Loan and Deposit Growth - Loans and advances to customers at amortised cost increased to £30.0bn, up from £25.4bn[52]. - Customer deposits at amortised cost increased to £88.7bn, up from £83.1bn[52]. - Total loans and advances at amortised cost reached £396.7 billion, with a coverage ratio of 1.4%[109]. - Total loans and advances at amortised cost including debt securities reached £429.998 billion[114]. Credit Quality and ECL - The total impairment allowance totals £5,289 million, with retail credit cards accounting for £3,329 million and corporate loans £1,326 million[118]. - The coverage ratio for total exposure is 1.4%, with retail credit cards having a significantly higher ratio of 8.3%[118]. - The total economic uncertainty adjustments for corporate loans in the UK are £39 million, while for corporate loans in the Rest of the World, they are £44 million[144]. - The ECL charge for the period totaled £2,279 million, with notable contributions from retail credit cards (£1,415 million) and corporate loans (£485 million)[128].