Barclays Q4 Earnings Increase Y/Y, Credit Impairment Charges Decline

Core Insights - Barclays reported a fourth-quarter 2025 net income of £1.19 billion ($1.63 billion), reflecting a 23.8% increase year-over-year, supported by revenue growth and a strong balance sheet [1][7] Financial Performance - Total income for the quarter was £7.08 billion ($9.65 billion), up 1.6% year-over-year [2] - Operating expenses (excluding litigation and conduct costs) rose to £4.61 billion ($6.28 billion), an increase of 3.1% year-over-year [2] - The cost-to-income ratio remained stable at 66% compared to the previous year [2] - Credit impairment charges decreased to £535 million ($729.7 million), down 24.7% year-over-year [2][7] - Pre-tax income was reported at £1.86 billion ($2.53 billion), an 11.9% increase from the prior-year quarter [2] Balance Sheet Strength - Total assets as of December 31, 2025, were £1,544.2 billion ($2,106.3 billion), a 1.7% increase from December 31, 2024 [3] - Total risk-weighted assets slightly decreased to £356.8 billion ($486.7 billion) as of December 31, 2025 [3] - The Common Equity Tier 1 (CET1) ratio improved to 14.3% from 13.6% a year earlier [3][7] Share Buyback and Capital Returns - Barclays announced a new share buyback plan of up to £1 billion concurrent with the earnings release [4] - The company plans to return at least £10 billion between 2024 and 2026 through dividends and share buybacks, with a preference for buybacks [9] - A multi-year capital return plan is subject to supervisory and board approvals [9] Future Guidance - For 2026, Barclays projects total income of £31 billion, up from a previous estimate of around £30 billion [5] - Net interest income (NII) is expected to exceed £13.5 billion, with Barclays U.K. projected to generate NII between £8.1 billion and £8.3 billion [5] - The cost-to-income ratio is anticipated to be in the high 50s percentage range [5] - The CET1 ratio is expected to remain between 13-14%, with a return on tangible equity (RoTE) estimated to exceed 12% [6] Long-term Outlook - Barclays expects total income to grow at a compound annual growth rate (CAGR) of more than 5% from 2025 to 2028 [10] - The cost-to-income ratio is projected to be in the low 50s, including gross efficiency savings of approximately £2 billion during 2026-2028 [10] - The loan loss rate is expected to remain stable at 50-60 basis points through the cycle [10]