Barclays announces £500 million buyback, upgrades 2025 guidance on strong income

[LONDON] Barclays announced a surprise £500 million (S$865.2 million) share buyback, upgraded its performance target for the year and said it would move to quarterly buyback announcements.

The British bank also said it now aimed to make a return on equity of greater than 11 per cent this year, thanks to better-than-expected income and faster implementation of cost savings plans.

That allowed it to bring forward plans to distribute excess capital to shareholders, CEO CS Venkatakrishnan said in the update.

“We have been robustly and consistently generating capital for our shareholders consecutively over the last nine quarters,” he said.

Third-quarter profit falls

Barclays reported its third-quarter pretax profit slipped 7 per cent to £2.1 billion, down from £2.232 billion a year ago and in line with the average of analysts’ forecasts.

The fall was partly driven by an increase in its provision for redress relating to Britain’s motor finance scandal of £235 million, bringing its total to £325 million.

The bank also said it had a £110 million “single name” credit impairment charge in its investment bank, which analysts at Citi immediately attributed to the collapse of US auto parts supplier Tricolor, an incident which has triggered wider concerns about banks’ exposure to private credit markets.

Barclays said such exposure accounted for £20 billion or 6 per cent of its overall loans, with 70 per cent of that exposure in the US.

Barclays said income at its investment bank rose 8 per cent in the third quarter year-on-year, with its global markets business rising 15 per cent but investment banking income dropping 4 per cent.

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The performance was worse than on Wall Street, where banks showed double-digit gains on the back of active markets and more dealmaking. REUTERS