Barclays financial results 2024: Profit before tax soars 24% amid strong capital distributions

Barclays PLC reported a significant improvement in its financial results for 2024, achieving a profit before tax of £8.1 billion, reflecting a 24% increase compared to the previous year. The British banking group also announced capital distributions amounting to £3.0 billion, reinforcing its commitment to delivering shareholder value. These distributions include £1.2 billion in dividends and £1.8 billion in share buybacks, further solidifying Barclays’ position as a bank focused on sustainable growth.

Group Chief Executive C. S. Venkatakrishnan stated that Barclays successfully met its financial targets, executing its strategic three-year plan with precision. The bank’s performance was driven by disciplined cost management, revenue growth across key divisions, and continued investment in digital banking services. Its return on tangible equity (RoTE) reached 10.5%, surpassing the 10% target set for the year.

With earnings per share (EPS) rising to 36.0 pence and the Tangible Net Asset Value (TNAV) per share increasing to 357 pence, Barclays strengthened its financial base, preparing for further expansion and profitability in the coming years.

What factors contributed to Barclays’ profit before tax increase?

Barclays’ financial results for 2024 were propelled by broad-based growth across its divisions. Barclays UK posted a 9% increase in income, reaching £8.3 billion, with much of this growth driven by the acquisition of Tesco Bank, which added a one-off gain of £556 million. The Barclays Investment Bank saw revenue rise 7% to £11.8 billion, benefitting from higher Investment Banking fees and improved performance in Global Markets.

The Barclays US Consumer Bank recorded an increase in net interest income, reaching £2.7 billion, despite the impact of currency fluctuations. Meanwhile, Barclays Private Bank and Wealth Management reported an 8% rise in income, supported by higher client asset balances and increased investment activity.

Cost efficiency initiatives also played a crucial role in boosting Barclays’ profit before tax. The bank successfully reduced its cost-to-income ratio to 62%, achieving £1.0 billion in gross efficiency savings over the year. This, coupled with a disciplined approach to capital allocation, helped the bank maintain a Common Equity Tier 1 (CET1) ratio of 13.6%, well within its target range of 13-14%.

How is Barclays returning capital to shareholders?

A key aspect of Barclays’ financial results in 2024 was its continued commitment to capital distributions, with £3.0 billion returned to shareholders. This included a dividend payout of 8.4 pence per share and share buybacks totalling £1.8 billion. The bank also announced an additional £1.0 billion share repurchase program, reinforcing its strategy of returning excess capital to investors.

Looking ahead, Barclays has outlined plans to return at least £10 billion to shareholders between 2024 and 2026, with a preference for increasing share buybacks. The bank intends to keep its dividend stable in absolute terms, ensuring long-term investor confidence while enhancing returns through a reduced share count.

Venkatakrishnan emphasized that Barclays remains focused on delivering progressive capital returns, supported by a robust financial performance and a disciplined cost strategy.

What are Barclays’ financial targets for 2025?

Barclays has set ambitious financial targets for 2025, aiming for a Group RoTE of approximately 11%. The bank expects to increase its net interest income (NII), forecasting £12.2 billion excluding Barclays Investment Bank, with £7.4 billion expected from Barclays UK.

The cost-to-income ratio is projected to improve further to approximately 61%, supported by additional efficiency measures expected to generate £0.5 billion in savings. The loan loss rate (LLR) is forecast to remain within 50-60 basis points, while Barclays’ CET1 ratio target remains within the 13-14% range, ensuring a strong capital position to support growth.

How does Barclays plan to achieve long-term growth?

Barclays’ strategic roadmap for 2026 includes achieving total revenue of approximately £30 billion while maintaining a cost-to-income ratio in the high 50s. The bank is focused on increasing efficiency, expanding its digital banking footprint, and strengthening its core lending and investment banking businesses.

As part of its growth strategy, Barclays is also enhancing its risk management framework, particularly in light of the evolving macroeconomic landscape and regulatory changes. The acquisition of Tesco Bank in late 2024 underscores Barclays’ intent to expand its retail banking division, while investments in digital banking and AI-driven financial services are expected to drive further growth.

Venkatakrishnan reiterated that Barclays remains committed to long-term value creation, balancing growth initiatives with a strong focus on capital discipline and shareholder returns.

Barclays’ financial results for 2024 highlight the bank’s ability to deliver strong profitability and capital efficiency, even amid global economic challenges. With profit before tax soaring 24%, a RoTE of 10.5%, and £3.0 billion in capital distributions, the bank has reinforced its position as a leader in the financial sector.

The outlook for 2025 remains positive, with Barclays targeting further profit growth, increased capital returns, and enhanced operational efficiency. As the bank progresses toward its 2026 targets, investors can expect a continued focus on shareholder value, strategic growth, and disciplined capital management.