Barclays PLC Reports 14.8% Return on Tangible Equity in H1 2026 and Raises Full-Year Income Forecast to £31.5bn

Consistent Double-Digit Returns Across All Divisions

Barclays achieved a 14.8% return on tangible equity in H1 2026, up from 13.2% in H1 2025. All five divisions recorded double-digit returns on equity in both the half-year and Q2, highlighting broad-based strength. Group CEO C. S. Venkatakrishnan expressed satisfaction with Q2 2026’s 16.1% return on tangible equity, an increase from 12.3% in Q2 2025, attributing this to disciplined capital allocation and enhanced operational leverage across geographies and business lines.

Profit before tax rose 17% year-over-year to £6.1bn in H1 2026, with Q2 profit before tax of £3.3bn marking a 31% increase compared to Q2 2025. Attributable profit reached £4.2bn, up 19% from £3.5bn in the prior year, supported by higher net interest income, strong investment banking and markets activity, and prudent impairment charge management. Tangible net asset value per share increased to 423p as of 30 June 2026 from 409p at end-2025, reflecting earnings accretion partially offset by shareholder distributions and changes in the cash flow hedging reserve.

Raised 2026 Income Guidance and Net Interest Income Expansion

Barclays upgraded its 2026 group income target to approximately £31.5bn from £31bn. Group income for H1 2026 reached £16.5bn, up 11% year-over-year, driven by higher Global Markets and Investment Banking fees, increased structural hedge income, and a £225m gain from selling the American Airlines co-branded credit cards portfolio. Excluding the Investment Bank and Head Office, group net interest income rose 11% to £6.8bn in H1 2026, prompting an increase in the 2026 net interest income target to over £13.7bn from over £13.5bn.

Within UK operations, Barclays UK generated £4.5bn income in H1 2026, up 8% year-over-year, with higher structural hedge income partially offset by retail deposit trends and mortgage margin pressure. The UK Corporate Bank contributed £1.1bn income, also up 8%, reflecting increased average deposit and lending balances. Q2 2026 group income reached £8.3bn, a 16% year-over-year rise, with net interest income excluding the Investment Bank and Head Office growing 10% to £3.4bn. This diversified income growth across lending spreads, fees, and treasury activities underscores the bank’s resilient earnings model despite competitive deposit and mortgage markets.

Loan Growth and Balance Sheet Expansion in Core UK Market

Barclays continued expanding its balance sheet in the UK, achieving 5% year-over-year loan growth in H1 2026. Since 2024, the bank has delivered £25bn of approximately £30bn planned UK risk-weighted asset growth, including £18bn of organic growth. In Q2 2026 alone, £3bn of RWA growth was achieved through lending expansion, reflecting the bank’s strategic focus on UK personal and commercial customers while maintaining capital ratios above regulatory minimums.

Total loans and advances at amortised cost rose to £444.8bn as of 30 June 2026 from £430.0bn at end-2025, an increase of £14.8bn or 3.4% over six months. The loan-to-deposit ratio improved to 75% from 73%, indicating balanced lending growth relative to funding. Deposits at amortised cost reached £594.4bn, providing a stable funding base. The bank’s strategy emphasizes continued organic UK lending growth to support economy-facing clients through competitive pricing and product innovation.

Capital Distributions and Shareholder Returns Surge 61% Year-Over-Year

Barclays declared total capital distributions of £2.3bn for H1 2026, a 61% increase from roughly £1.4bn in H1 2025. This includes a £1.0bn share buyback announced for Q2 2026 and a 5.9p dividend per ordinary share, up from 3.0p the previous year. The bank plans further quarterly buybacks targeting at least £10bn in capital distributions from 2024 to 2026, favoring buybacks over special dividends.

For 2026, the bank anticipates paying approximately £2bn in dividends, semi-annually. Barclays remains committed to meeting all financial and distribution targets for 2026 and 2028. From 2026 to 2028, it plans to return more than £15bn to shareholders via dividends and buybacks, while maintaining a common equity tier one ratio target of 13% to 14%. The higher 5.9p dividend per share in H1 2026 reflects improved earnings capacity and confidence in the outlook.

Enhanced Cost Efficiency and Operating Leverage Amid Investment

Group operating expenses rose 6% to £9.1bn in H1 2026 from £8.6bn in H1 2025, but the cost-to-income ratio improved to 55% from 58%, showing better operational leverage. In Q2 2026, the ratio dropped to 54% from 59% in Q2 2025. Operating costs increased 6% to £8.9bn, driven by business growth, higher performance costs, inflation, and investments including the Best Egg Inc. acquisition, partially offset by £350m in cost savings and favorable foreign exchange.

Q2 2026 operating costs of £4.5bn rose 9% year-over-year from £4.1bn, with £200m in cost savings achieved. Efficiency programs support the 2028 cost-to-income target in the low 50s, including over £2bn in gross efficiency savings planned from 2026 to 2028. Litigation and conduct charges of £108m in H1 2026 mainly reflect a £105m provision increase for the UK FCA motor finance redress scheme, a legacy matter unrelated to current operations.

Investment Bank Outperforms; Best Egg Acquisition Expands US Consumer Bank

The Barclays Investment Bank posted £8.0bn income in H1 2026, up 11% year-over-year, with a 16.0% return on tangible equity. Q2 2026 income hit £4.0bn, a 20% increase year-over-year, fueled by strong Global Markets and Investment Banking fees. Global Markets benefited from elevated client activity in fixed income and equities, while Investment Banking fees grew due to robust advisory and capital markets activity. The division significantly contributed to group ROE improvement and continues to deploy balance sheet in key client markets.

The Barclays US Consumer Bank broadened its market reach by acquiring Best Egg Inc., a personal loan and financial wellness platform. Combined with the £225m sale of the American Airlines co-branded credit cards portfolio, this resulted in a net positive regulatory capital impact, including a marginal rise in the common equity tier one ratio and a net £3.2bn release in risk-weighted assets partially offset by a £0.2bn capital decrease. US Consumer Bank income grew 26% to £2.1bn in H1 2026 and 38% to £1.1bn in Q2 2026, driven by the portfolio gain, Best Egg acquisition, and broader business momentum. This strategic repositioning supports the bank’s goal of returning the US Consumer Bank to profitability and growth within risk limits.

Strong Capital Position and Risk-Weighted Asset Management

Barclays maintained a solid common equity tier one ratio of 14.3% as of 30 June 2026, steady from 31 December 2025 and above its 13% to 14% target range. Factoring in the £1.0bn share buyback announced on 30 July 2026, the CET1 ratio would adjust to 14.0%, placing the bank at the top of its target range. Risk-weighted assets rose to £364.8bn from £356.8bn at end-2025, driven by UK lending growth and increased Global Markets activity. RWA growth of £9.8bn excluding foreign exchange was mainly organic lending expansion, partially offset by a £3.2bn release from US Consumer Bank portfolio changes.

The bank anticipates regulatory capital impacts from Basel 3.1 and other rule changes totaling approximately £19bn to £26bn in risk-weighted assets. Around £8bn to £15bn of this is expected from Basel 3.1 implementation starting 1 January 2027, with the fundamental review of the trading book impact mainly in 2027. Additionally, a £11bn RWA reduction is expected from the US Consumer Bank’s transition to an Internal Ratings Based model, pending portfolio changes and regulatory approval, with implementation planned for H2 2027. Total assets increased to £1,730.4bn from £1,544.2bn at end-2025, reflecting higher Investment Bank trading activity, liquidity pool growth, and expanded lending.

Private Banking Growth and Stable Credit Quality

Barclays Private Bank and Wealth Management posted £713m income in H1 2026, up 2% year-over-year, driven by client balance growth partially offset by deposit mix changes. Q2 2026 income rose 5% to £366m, supported by client asset growth and higher fee income. The division focuses on high-net-worth and family office clients across geographies, leveraging the group’s investment banking, lending, and treasury capabilities for sophisticated wealth management.

Credit quality remained stable with a loan loss rate of 62 basis points in H1 2026, within the bank’s through-the-cycle guidance of 50 to 60 basis points. Credit impairment charges totaled £1.4bn versus £1.1bn in H1 2025, mainly due to a £228m single-name charge in the Investment Bank in Q1 2026 related to a specific counterparty. The impairment coverage ratio held steady at 1.2% as of 30 June 2026, consistent with year-end 2025. The bank expects the group loan loss rate to average near the top of the 50 to 60 basis points range in 2026, reflecting normalized economic activity and credit conditions.

Confirmed 2026 and 2028 Financial Targets with Upgraded Outlook

Barclays reaffirmed its commitment to all financial and distribution targets for 2026 and 2028. For 2026, the bank targets a return on tangible equity above 12%, with H1 2026’s 14.8% indicating it is ahead of schedule. The upgraded group total income target of approximately £31.5bn aligns with the upper range of guidance, while net interest income excluding the Investment Bank and Head Office was raised to over £13.7bn from over £13.5bn. The cost-to-income ratio target remains in the high 50s percentage range, with H1 2026 already achieving 55%.

By 2028, Barclays aims for a return on tangible equity exceeding 14%, group income growing at a compound annual rate above 5% from 2025 to 2028, and a cost-to-income ratio in the low 50s. Efficiency savings exceeding £2bn are planned for 2026–2028. The bank intends to maintain its common equity tier one ratio target of 13% to 14% and reduce the Investment Bank’s share of total group risk-weighted assets to about 50% by 2028, down from the mid-50s currently. Barclays remains confident in achieving these goals, supporting the announced capital distributions and progressive capital return increases throughout 2026.

Macroeconomic Assumptions and Forward-Looking Risks

Barclays’ 2026–2028 outlook and targets are based on current management assumptions about inflation, interest rates, unemployment, and competitive conditions in key markets. The bank warns that actual results may differ materially due to factors beyond its control, including changes in UK, US, Eurozone, and global economic conditions, credit and capital market volatility, interest and foreign exchange rate fluctuations, regulatory changes, geopolitical conflicts in the Middle East and Ukraine, and cyber and technology risks.

The group’s performance is also exposed to financial crime risks, evolving consumer behavior, benchmark interest rate reforms, and competition in banking and financial services. Regulatory investigations, capital and liquidity rule changes, tax law modifications, and the success of acquisitions and strategic initiatives pose additional risks. A 4% year-over-year depreciation of average sterling against the US dollar negatively impacted income and profits in H1 2026 but favorably affected credit impairment charges and operating expenses, illustrating foreign exchange exposure. Barclays does not undertake to update forward-looking statements unless legally required.