Barclays (NYSE:BCS) used its full-year 2025 fixed income investor call to outline what Group Finance Director Anna Cross described as a year in which the bank “achieved all financial targets and guidance,” while also providing an update on its medium-term targets and capital planning ahead of expected regulatory changes.
2025 performance and updated targets
Cross said Barclays generated a return on tangible equity (RoTE) of 11.3% in 2025. Top-line income rose 9% year-on-year to GBP 29.1 billion, and the bank said it achieved its net interest income (NII) guidance for both the group and Barclays UK.
Looking ahead, Cross said Barclays is targeting group RoTE above 12% in 2026, building to more than 14% in 2028. She said stable income streams in retail and corporate banking are expected to “materially drive income” over the next three years, with the structural hedge contributing around 50% of total income growth over that period.
On expenses, Cross said Barclays expects modest cost growth, supported by efficiency savings and normalization of an “elevated” 2025 cost base. Management expects “positive jaws” each year of the plan and a low-50s group cost-income ratio in 2028.
Capital, RWAs, and regulatory outlook
Group Treasurer Dan Fairclough said Barclays ended 2025 with a CET1 ratio of 14.3% and generated 173 basis points of capital from profits. Given the capital position, the bank announced a GBP 1 billion share buyback and a GBP 800 million final dividend, equivalent to 5.6 pence per share. Adjusting for the buyback, Fairclough said CET1 would be 14%.
Fairclough reiterated Barclays’ expectation of GBP 19 billion to GBP 26 billion of regulatory RWA inflation, including an estimated circa GBP 16 billion effect of IRB migration in the US Consumer Bank. He said around GBP 5 billion of that is now expected to occur with Basel 3.1 implementation on Jan. 1, 2027, with the remainder anticipated later in 2027.
In addition, Barclays continues to expect a Basel 3.1 day-one impact of GBP 3 billion to GBP 10 billion of RWAs, with further guidance expected later in the year as final rules are worked through. Fairclough added the bank may use an option to implement some elements of the FRTB later, on Jan. 1, 2028, potentially deferring a small amount of impact.
Fairclough also said Barclays expects a reduction in the Group Pillar 2A requirement following the regulatory changes. He said Barclays has been operating near the top of its CET1 target range ahead of the expected developments, and that after implementation, the bank will consider where it operates within the range.
Addressing the UK regulatory landscape, Fairclough said Barclays welcomed the “constructive tone” of the Financial Policy Committee review but emphasized that the reduced system-wide benchmark for Tier 1 capital “does not affect the industry’s current capital requirements or operating levels in itself.”
Funding and liquidity, including structural hedge contribution
On capital stack metrics, Fairclough said Barclays reported a Tier 1 ratio of 17.9% against a 14.6% regulatory requirement, with an AT1 component of 3.6%. He said Barclays expects to maintain robust ratios across tiers and has a “light” capital redemption profile in 2026, including no AT1 calls.
In 2025, Barclays issued GBP 16 billion of MREL, ending the year with an MREL ratio of 35.8%. For 2026, management expects GBP 10 billion of issuance “with a skew towards senior,” reflecting more limited requirements for AT1 and Tier 2. Fairclough said the lower target reflects pre-funding in 2025 and the maturity profile through 2026, and he highlighted steps to extend weighted average life, including a non-call 10 euro AT1 and a non-call 20 senior transaction, both of which saw strong demand.
Liquidity metrics remained strong, with an average LCR of 170%, representing GBP 131 billion in excess of regulatory requirements. The bank reported an average net stable funding ratio of 135% and a loan-to-deposit ratio of 73%. Fairclough said deposits increased by GBP 25 billion across customer segments, driven by corporate growth tied to a developing US dollar offering in the International Corporate Bank and improved UK Corporate Bank market share, alongside retail deposit growth in the UK and US Consumer Bank.
Management also detailed the structural hedge impact in 2025. Fairclough said stable deposits enabled the full reinvestment of maturing structural hedges during the year (versus a prior assumption of 90%), and reinvestment occurred at circa 3.8% compared with a 3.5% assumption. As a result, gross structural hedge income increased by GBP 1.2 billion to GBP 5.9 billion, contributing 46% of 2025 group NII (excluding the Investment Bank and head office).
Looking forward, Fairclough said Barclays has already locked in GBP 6.4 billion of gross structural hedge income in 2026 and GBP 17 billion over the next three years. He also said the bank increased average hedge duration to three and a half years, reducing maturing hedges to circa GBP 35 billion per year from around GBP 50 billion in recent years, which slows growth but “prolongs” the expected positive effect until at least 2029.
Q&A: acquisitions, SRT activity, ratings, and investment bank balance sheet
During Q&A, Cross addressed investor questions about appetite for inorganic growth, pointing to recent transactions including Kensington, Tesco, and Best Egg. She said the common elements were alignment with strategy (delivering capability or volume), a focus on price and returns (including relative return versus buybacks), and avoiding overly complex integrations that could distract from executing the plan. Cross emphasized that operating at the top end of the capital range was tied to pending regulatory clarity rather than signaling a near-term acquisition, adding that if Barclays cannot deploy investment capacity “sensibly,” it will be returned to shareholders.
On significant risk transfer (SRT), Fairclough said Barclays views SRT as a risk management tool. He described the Colonnade program as “broadly at scale” and said the bank focuses on RWA amortization and potential RWA drag if clients are refinanced. Outside Colonnade, he characterized SRT as more targeted, citing mortgage and consumer loan transactions in the UK, and described Best Egg as closer to an originate-to-distribute model with “relatively modest” activity. Management said it does not disclose the stage 2/stage 3 impact, though Fairclough noted there is a benefit and said Barclays has at times targeted transactions to stage 2 and stage 3 exposures.
Asked about ratings, Fairclough reiterated the goal for Barclays PLC senior to qualify as a single-A composite across indices, which would require an upgrade from either Moody’s or S&P. Cross and Fairclough said Barclays believes its improved profitability, capital generation, and rebalancing support the objective, while noting that rating agencies will make their own decisions.
On Investment Bank RWAs, Cross pointed to a slide in the bank’s materials showing the split and said Barclays has reduced RWAs in banking over the past three years by reviewing a capital-heavy loan book and making tougher decisions on client returns. She said RWAs have been deployed into markets, and that the optimal mix changes over time as the Investment Bank is managed as a single business. Cross also said Barclays has been growing share in DCM while remaining disciplined on capital.
Digital assets and other disclosures
Fairclough also discussed digital assets as an area of focus, describing an “ambition to leverage digital technology” and efforts to develop tokenization of Barclays’ own deposits to enable faster and simpler transactions. He said Barclays is participating in the Sterling Tokenized Deposits (GBTD) pilot, which will test retail use cases such as remortgages and wholesale use cases such as corporate bond issuance and investment, and said the bank is exploring roles in the stablecoin value chain alongside other global systemically important banks.
On a technical liquidity question, Fairclough said a change tied to the FSCS guarantee threshold resulted in a “relatively minor” impact for Barclays, representing about GBP 1 billion of liquidity value, and did not materially move the LCR.
About Barclays (NYSE:BCS)
Barclays PLC (NYSE: BCS) is a British multinational bank and financial services company headquartered in London. The firm provides a broad range of banking and financial products to individual, corporate and institutional customers. Its core activities span retail and business banking, credit cards and payments, corporate and investment banking, and wealth and investment management.
In retail and business banking, Barclays offers deposit accounts, mortgages, personal and business loans, and card services.
