Barclays PLC Q4 FY2025 earnings call

Coimbatore Venkatakrishnan started by noting Barclays achieved all 2025 financial targets, generated 11.3% return on tangible equity, top line grew 9% to GBP 29.1 billion, cost/income ratio 61%, loan loss rate 52 basis points, announced GBP 3.7 billion shareholder distributions. Simplified the bank, achieved GBP 700 million gross efficiency savings, divested non-strategic businesses. Angela Cross detailed financial highlights for Q4 and full year, including return on tangible equity increase, pre-provision profit increase, income growth, structural hedge details, cost efficiency savings, impairment charge, U.K. lending progress, Barclays U.K. financials, U.K. Corporate Bank performance, Private Bank and Wealth Management status, Investment Bank details, U.S. Consumer Bank progress. Venkatakrishnan outlined the next 3 years plan, focusing on becoming simpler, better, and more balanced, with investments in technology, AI, cloud computing, data platforms, and driving segment-leading businesses and deeper client relationships

Barclays achieved all financial targets and guidance in 2025. Return on tangible equity was 11.3%. Top line grew 9% to GBP 29.1 billion. Cost/income ratio improved to 61%. Group loan loss rate 52 basis points. All divisions generated double-digit RoTE. Investment Bank RoTE increased 2.1 percentage points to 10.6%. U.S. Consumer Bank RoTE increased 1.9 percentage points to 11%. Barclays U.K. NII of GBP 7.7 billion in 2025, expected to increase to between GBP 8.1 billion and GBP 8.3 billion in 2026. Private Bank and Wealth Management RoTE 26.3% for 2025, on track for >25% target in 2026. Investment Bank delivered full year RoTE of 10.6% in 2025, up 210 basis points. U.S. Consumer Bank Q4 RoTE 15.8% supported by one-off benefit, full year RoTE 11%

Expect group income of GBP 31 billion in 2026, GBP 1 billion more than previously expected. Confident in delivering target RoTE >12% in 2026. Target return on tangible equity >14% in 2028. Expect greater than GBP 15 billion of regulatory RWA inflation within GBP 19 billion to GBP 26 billion. Anticipate reduction in group Pillar 2A requirement following regulatory changes. Expect a progressive increase in total payout in 2026, increase dividend to GBP 2 billion in 2026. Investment Bank RWAs to be mid-50s percent of group RWAs in 2026, falling to about 50% by 2028. Group cost/income ratio to be low 50s percent by 2028 with circa GBP 2 billion of gross cost efficiency savings over next 3 years

Changes in the operating environment globally present risks. AI has transformative opportunities but also contains risks that need to be managed. Regulatory changes in different regions can impact the business. Competitive pressures in the market can affect market share and financial performance. Tailwinds or headwinds in the economy can impact lending, deposit, and other financial aspects. Uncertainties in deal flow and market conditions can affect Investment Banking fees and performance

Q: Two questions, one on capital return capacity to support investment and growth, second on middle office integration.

A: Angela Cross said capital generation level surpasses distribution and investment, creating capacity for additional investment if right opportunities. Venkatakrishnan said investment is in areas with quick revenue realization.

Q: One on cost element, how to come down by 2028 and beyond, second on RWAs in Investment Bank.

A: Angela Cross said cost efficiency driven by technology efficiency. Venkatakrishnan and Angela Cross said Investment Bank RWAs flat due to loan book review, International Corporate Bank growth, etc.

Q: One on capital targets and regulator, second on mortgage book headwind.

A: Angela Cross said operate at top of 13%-14% CET1 range, mortgage book headwind due to mortgages written at end of 2020 and start of 2021.

Q: One on Private Bank and Wealth Management products, second on U.K. loan book growth.

A: Coimbatore Venkatakrishnan said scaling journey for Private Bank and Wealth Management. Angela Cross and Coimbatore Venkatakrishnan said U.K. loan book growth above GDP due to capability, product architecture, etc.

Q: One on hedge duration and deposit betas, second on Investment Bank and U.S. Consumer Bank.

A: Angela Cross said hedge duration extension reflects customer behavior. Angela Cross and Coimbatore Venkatakrishnan addressed Investment Bank and U.S. Consumer Bank details.

Q: One on income guidance and product margin, second on Investment Bank and AI.

A: Angela Cross said product margin underpinned by hedge tailwind. Coimbatore Venkatakrishnan and Angela Cross addressed Investment Bank and AI implementation.

Q: One on income planning and investment, second on IB and deposit volumes.

A: Angela Cross said plan balances delivery and long-term growth. Angela Cross said U.K. deposit progress due to multi-brands.

Q: One on tax rate and IB competitive environment, second on BUK profitability and IB fees.

A: Angela Cross said tax rate lumpy but look at full year. Coimbatore Venkatakrishnan and Angela Cross addressed BUK profitability and IB fees market share.

Q: One on capital generation and TNAV, second on BUK and IB.

A: Angela Cross said capital generation and distribution hierarchy. Coimbatore Venkatakrishnan and Angela Cross addressed BUK and IB details