Barclays increased its 2025 performance targets on Thursday following a 24% rise in annual pretax profit, driven by growth in investment banking income and strength in its domestic lending business. Despite the bank's shares falling by 5.5% in early trading, analysts believe this could be attributed to profit-taking related to rising costs and UK impairments missing forecasts.
Barclays, the first major UK bank to report 2024 earnings, saw its profit before tax for the year ending December 31 reach 8.1 billion pounds ($10.12 billion), slightly exceeding analysts' forecasts and higher than the previous year's 6.6 billion pounds.
CEO C.S. Venkatakrishnan aims to boost the bank's share price through cost-cutting, returning excess capital to shareholders, and investing in the UK business. The bank met its 2024 performance targets, notably achieving a return on tangible equity of 10.5%, in line with the guidance for over 10%.
Looking ahead to 2025, Barclays set a new Group Return on Tangible Equity (RoTE) target of around 11%, marking a significant progression towards its 2026 goal of over 12%. Analysts at Citi viewed the results as solid, noting the stock's positive performance over the past year and its favorable valuation.
Barclays extended Nigel Higgins' chairmanship for another three years to advance its turnaround plan. Total income for Barclays' investment bank slightly surpassed expectations at 11.8 billion pounds, driven by increased dealmaking and trading activity.
Furthermore, Barclays observed growth in its traditional trading business, with fixed income, currencies, and commodities (FICC) revenue increasing by 29% in the final quarter of 2024. Equities revenue also rose by 40% during the same period, outstripping gains at major U.S. rivals.
Barclays' performance in investment banking fees for M&A deals and fundraising saw an 11% increase, contrasting with a 35% average among Wall Street competitors. RBC Brewin Dolphin investment manager Zoe Gillespie highlighted Barclays' newfound consistency and positive performance across the board.
(1 USD = 0.8004 GBP)