Barclays PLC (BARC.L) reported a significant 24% increase in both pre-tax and attributable profits for the full year 2024, exceeding market expectations. The bank also announced a £1 billion ($1.25 billion) share buyback program, signaling confidence in its future performance. This positive news comes as the financial institution continues to execute its three-year strategic plan.
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Barclays reported a pre-tax profit of £8.1 billion for the full year, a substantial increase from the previous year. In the fourth quarter alone, pre-tax profit reached £1.66 billion, surpassing analyst consensus forecasts of £1.62 billion. Attributable profit, the profit belonging to shareholders, also saw a 24% rise to £5.3 billion for the year, with £965 million generated in the fourth quarter. While slightly below the estimated £989 million, the overall performance remained strong.
Robust Financial Performance Across Key Metrics
A key driver of Barclays’ success was its net interest income, which measures the difference between interest earned on loans and interest paid on deposits. For 2024, net interest income reached £11.2 billion, meeting the bank’s target. This achievement underscores the effectiveness of Barclays’ core banking operations in a favorable interest rate environment. The bank also announced a full-year dividend of 5.5 pence per share.
Group CEO C.S. Venkatakrishnan attributed the positive results to the “disciplined execution” of the bank’s three-year plan. He highlighted the commitment to delivering value for customers and clients, emphasizing operational and financial improvements. Looking ahead, Venkatakrishnan outlined plans to distribute £10 billion of capital to shareholders by 2026, with a progressive increase planned for 2025.
Positive Outlook and Analyst Commentary
Barclays’ overall income for 2024 grew by 6% to £26.8 billion, with its UK business showing a particularly strong 9% increase, partly due to the acquisition of Tesco Bank. Operating expenses were down 1% year-on-year to £16.7 billion, further contributing to profitability. In the fourth quarter, operating expenses decreased by 7% to £4.6 billion. The bank also provided optimistic guidance for the future, projecting a net interest income of £12.2 billion for 2025 and total income of approximately £30 billion for 2026.
Despite the strong financial performance, Barclays’ share price experienced a slight dip of 4.6% immediately following the market opening. However, analysts viewed this reaction as potentially overly harsh. Matt Britzman, senior equity analyst at Hargreaves Lansdown, praised Barclays for setting a “decent benchmark” for the banking sector, noting the impressive final quarter performance in both UK and investment banking divisions. He highlighted the bank’s solid credit quality, strong capital position, and the substantial capital return plan for shareholders.
Conclusion: Continued Growth and Shareholder Value
Barclays’ 2024 results demonstrate a year of robust financial performance, exceeding expectations and highlighting the success of its strategic initiatives. The announced share buyback and dividend payments underscore the bank’s commitment to returning value to shareholders. While the initial market reaction was muted, analysts remain optimistic about Barclays’ future prospects, citing strong fundamentals and positive guidance for the coming years. The bank appears well-positioned for continued growth and profitability.
