Barclays is set to launch a new £750m share buyback programme and has upgraded its longer-term earnings guidance, after an improvement in its trading income offset a 9% drop in profit in H1.

The British bank said it now expects a return on tangible equity to be over 12% by 2026, an improvement on the target of over 10% in 2024.

The share buyback comes as the bank announced plans to return at least £10bn of capital to shareholders between 2024 and 2026, in line with a sector-wide trend, Reuters has reported.

In Q2, Barclays saw its investment bank equities revenue jump by a quarter (24%). Across this period, the bank also recorded a profit before tax jump to £1.9bn, after earlier predictions of £1.6bn.

Head of markets at interactive investor, Richard Hunter, said: "Despite some pockets of weakness among the numbers, the strength of Barclays’ diversified model has won through, resulting in a mostly pleasing performance.

"Revenues in the second quarter of £6.3bn were above the expected £6.16bn, leading to a half-year number of £13.3bn, itself down by 2% on the previous year. The trend was echoed at the pre-tax profit level, where a second quarter figure of £1.9bn exceeded the estimated £1.56bn, but where the half-year number of £4.2bn was 8% lower than the corresponding period. Among the culprits for the lower numbers were mortgage margin pressure and adverse deposit dynamics as customers sought higher rates elsewhere, although both of these improved in the second quarter to hopefully establish a more positive direction of travel."

Senior equity analyst at Hargreaves Lansdown, Matt Britzman, added: "As we’ve seen from peers, Barclays continues to call out the strong UK borrower with low missed credit card payments, good mortgage quality, and an improved economic outlook all helping to keep those pesky impairment charges down. Barclays also has a huge US card business, and impairments were also better than expected, but our friends across the pond are under a little more pressure and write-offs have been ticking higher.

"Upgrades to guidance should be well received, as will the better-than-expected loan losses and investment banking performance. Barclays has been one of the best-performing UK banks over 2024 to date, up 57% on a total return basis. The UK arm, though not quite as well placed as peers like NatWest, should be set to benefit from improving trends. At the same time, if the investment banking business can continue to push higher, there could be more upside to come."

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