Barclays profit surges more than expected as investment banking business thrives

Barclays (BARC.L) reported a stronger-than-expected 19% rise in first-quarter profit, as improved performance in its investment banking division helped the UK lender outpace analyst forecasts.

Pre-tax profit for the three months to March rose to £2.7bn ($3.6bn), exceeding analysts’ expectations of £2.49bn, according to data from LSEG. Group revenues reached £7.7bn, also ahead of the consensus estimate of £7.33bn.

Income at the investment bank, a key earnings driver for the group, rose 16% in the quarter. Barclays also recorded a return on tangible equity — a key measure of profitability — of 14%, a sharp improvement from 7.5% in the final quarter of 2024.

Chief executive CS Venkatakrishnan said the company was well placed to support customers and clients and “deliver strong risk-adjusted returns in a wide range of macroeconomic scenarios”.

Barclays’ investment bank reported revenues of £3.9bn in the first three months of the year, up 16% from the same period last year, with equities trading bringing in £963m.

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UK income increased 14%, driven by the use of structural hedges against interest rate volatility and the acquisition of Tesco Bank.

It increased provisions for loans expected to turn sour to £643m from £513m a year ago, largely driven by £74m set aside for “elevated US macroeconomic uncertainty”.

The group said it “continues to monitor the heightened uncertainty in the near-term macroeconomic outlook, especially in the US”.

Will Howlett, financials analyst at Quilter Cheviot, said: “Barclays has been one of the winners of the recent tariff induced volatility, with a solid set of first quarter results driven by trading revenues in the investment bank ahead of Donald Trump’s announcements earlier this month.

“Barclays has been on somewhat of a good run of momentum and these results represent a further quarter of progress towards its 2026 targets set out two years ago.”

Despite rising geopolitical and economic uncertainty — including heightened trade tensions following US president Donald Trump’s announcement of sweeping tariffs on 2 April — Barclays reiterated its performance targets for the year.

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The bank also raised its 2025 income guidance to over £12.5bn, up from a previous forecast of £12.2bn. The revision reflects confidence in the outlook for its domestic lending business, where Barclays has been competing aggressively in the mortgage and consumer credit markets.