Bank maintains earnings growth trajectory after early-year gains
Barclays has reported an increase in its UK mortgage lending and profits for the first half of 2025.
The banking giant’s UK mortgage balances reached £166.8 billion as of June 30, up 3.5% from £161.1 billion a year earlier. Gross mortgage lending for the first six months of 2025 totalled £15.4 billion, up 67.4% compared with £9.2 billion during the same period last year.
The average loan-to-value (LTV) ratio for Barclays’ mortgage portfolio rose slightly to 54%, while the average LTV for new lending increased to 70%, up from 63% in 2024. This indicates that new borrowers are taking on higher debt relative to property values.
Barclays reported a pre-tax profit of £2.84 billion for the second quarter, a 28% increase from the same period last year and above consensus expectations of £2.24 billion. Pre-tax profit for the first half of the year was £5.2 billion, up 23% year-on-year. Total income for the second quarter rose 14% to £7.19 billion, also exceeding forecasts.
Income from the bank’s investment division increased by 10% to £3.3 billion in the second quarter, driven by higher trading activity amid global market volatility. Group net interest income, excluding the investment bank and head office, was £3.1 billion, up 13% from a year earlier.
Return on tangible equity for the second quarter was 12.3%, compared to 9.9% in 2024. Barclays announced an additional £1 billion share buyback and a half-year dividend of 3p per share, following the completion of a previous £1 billion buyback programme.
“We remain on track to achieve the objectives of our three-year plan, delivering structurally higher and more stable returns for our investors,” said CS Venkatakrishnan, chief executive of Barclays.
“At the mid-point of the plan, with six quarters of consistent execution, we have achieved over half of the c.£30 billion planned UK risk weighted assets (RWAs) growth, half of the target income growth and realised two-thirds of the £2 billion planned gross cost efficiency savings.”
Barclays had previously reported a 19% increase in first-quarter profits, supported by improved performance in its investment banking division. For the three months to March, pre-tax profit was £2.7 billion, ahead of analyst expectations, with group revenues reaching £7.7 billion.
Analysts are generally upbeat towards the stock, with 13 buy recommendations, four holds and no sells. This is a much more positive outlook than for rival Lloyds, which is a consensus hold.
Other major UK banks, including Lloyds and NatWest, also reported higher-than-expected profits last week. HSBC is scheduled to release its results on Wednesday.
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