Barclays reported a strong rise in second-quarter earnings on Tuesday, driven by robust trading activity in its investment banking division, while renewed calls from Britain’s largest trade union intensified pressure on the government to increase taxes on bank profits.
The FTSE 100 lender posted profit before tax of £3.3 billion for the three months, a 31 percent increase from a year earlier. The results exceeded market expectations and prompted Barclays to raise its full-year income forecast.
The bank now expects group income of about £31.5 billion for 2026, up from its previous guidance of around £31 billion.
Group income rose 16 percent to £8.3 billion during the second quarter, while first-half income increased 11 percent to £16.5 billion. Profit before tax for the first six months of the year climbed 17 percent to £6.1 billion.
Barclays said its investment banking business delivered particularly strong results, with profit before tax rising 32 percent to £1.7 billion during the quarter. Equities trading income surged 45 percent as market volatility created more trading opportunities, reflecting a trend also seen at major Wall Street banks.
Corporate banking also posted solid growth, with first-half income increasing 8 percent to £1 billion and profit before tax rising 30 percent to £566 million.
In the retail banking division, net interest income, which measures the difference between interest earned on loans and interest paid to savers, rose 8 percent to £4.5 billion. Profit before tax in the business increased 10 percent to £1.8 billion.
Private banking and wealth management reported a more mixed performance. Income edged up 2 percent to £713 million, while profit before tax fell 21 percent to £186 million.
The bank also increased provisions for loan losses to £1.4 billion from £1.1 billion. Barclays said the increase was mainly linked to funds set aside following the collapse of mortgage and bridging finance provider Market Financial Solutions, which failed amid allegations of fraud.
Alongside the results, Barclays announced a £1 billion share buyback and increased its interim dividend to 5.9 pence per share, compared with 3 pence a year earlier.
The earnings were released as the Trades Union Congress (TUC) renewed calls for higher taxes on bank profits. TUC General Secretary Paul Nowak said profitable lenders should contribute more through a higher bank surcharge to help ease pressure on households facing high energy costs.
The current surcharge on bank profits, paid in addition to corporation tax, was reduced from 8 percent to 3 percent in April 2023.
Barclays Chief Executive C.S. Venkatakrishnan, known as Venkat, defended the banking sector during a media briefing, arguing that UK banks already face one of the highest effective tax burdens in the world. He said banks play a vital role in supporting economic growth through lending to businesses and consumers.
Despite the strong financial results, Barclays shares fell 5 percent to 503 pence as some investors had expected an even stronger performance after the stock gained nearly 40 percent over the past year.
Analysts at Shore Capital said expectations had risen sharply ahead of the earnings announcement, although they noted that Barclays’ investment banking and corporate banking divisions remained the strongest contributors to the group’s overall performance.
