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Barclays PLC (BARC) has reported a Group statutory Return on Tangible Equity (RoTE) of 11.1% for the first half of 2024, with a slightly higher 12.0% RoTE when excluding inorganic activity. For the second quarter of 2024, the Group's statutory RoTE was 9.9%, rising to 11.8% excluding inorganic factors. These figures reflect the bank's strong operational performance, with 2024 RoTE targets remaining unchanged.
Capital Position and Shareholder Returns
The impact of inorganic activity was broadly neutral on Barclays' Common Equity Tier 1 (CET1) ratio, which stood at 13.6% at the end of the second quarter. The bank completed a £1 billion share buyback, as announced with the FY23 results, and has now announced an additional buyback of up to £750 million. Additionally, a dividend of 2.9p per share for the first half of 2024 has been declared, demonstrating Barclays' commitment to returning value to shareholders.
Revised Net Interest Income Guidance
Barclays has increased its guidance for 2024 Group Net Interest Income (NII), excluding Investment Bank (IB) and Head Office, from approximately £10.7 billion to around £11.0 billion. The revised forecast is driven by a higher-than-expected interest rate environment and improving deposit dynamics. Notably, the updated guidance excludes the acquisition of Tesco Bank, which is expected to complete at the beginning of November 2024. Specifically, Barclays UK NII guidance has been raised from approximately £6.1 billion to around £6.3 billion.
Cost Efficiency and Future Targets
The Group achieved a cost: income ratio of 62% for the first half of 2024, with a target of approximately 63% for the full year. Barclays delivered an additional £0.2 billion in gross cost efficiency savings in the second quarter, bringing the total for the first half to £0.4 billion. The bank remains on track to achieve around £1 billion in gross cost efficiency savings for the full year 2024.
Looking ahead to 2026, Barclays is targeting a RoTE of greater than 12%. The bank plans to return at least £10 billion of capital to shareholders between 2024 and 2026 through dividends and share buybacks, with a continued preference for buybacks. The total dividend is expected to remain stable at the 2023 level in absolute terms, with progressive growth in dividend per share driven by a reduction in share count from increased buybacks. Barclays is also targeting Group total income of approximately £30 billion by 2026.
