(Credit: William - stock.adobe.com)

The bank’s shares rose over 1.5% following the announcement, but have since retraced during the day’s trading.

The positive results were largely driven by the investment banking division, which capitalised on market volatility, increasing its income by 16% year-on-year to £3.9bn. Increased transactional activity, partly linked to market reactions ahead of anticipated US trade tariffs, also benefited the private bank and wealth management arm, where income climbed 12% to £349 million.

Group income saw an 11% rise to £7.7bn, helping to offset a 5% increase in operating expenses (£4.4bn).

Profitability metrics improved, with the net interest margin – a key measure of lending profitability – rising 46 basis points to 3.55%. Consequently, Barclays raised its net interest income guidance for the year, expecting £12.5bn (excluding the investment bank) and £7.6bn for its UK operations. In the UK, income grew 14% to £2bn, despite pressures from higher deposit costs and tighter mortgage margins.

The bank recorded a loan loss rate of 61 basis points and set aside £74m due to “elevated US macroeconomic uncertainty”, similar to provisions made by competitor HSBC.

Analysts noted the strong performance across the portfolio, highlighting stable credit card trends and low default levels. Chief Executive C S Venkatakrishnan expressed confidence in meeting financial targets for 2025 and 2026, citing the bank’s diversified businesses and robust balance sheet. Barclays confirmed it achieved a 14% return on tangible equity in the quarter.