Mortgage Market Trends: What Homebuyers Should Watch in 2025

British banking giant Barclays has demonstrated notable resilience amid 2025's economic uncertainties. The bank reported a pre-tax profit of £2.7 billion in Q1 2025, exceeding market expectations by 8.4%. With inflation concerns and monetary policy shifts affecting global markets, several specific factors are influencing Barclays' performance. Understanding these elements has become essential for those monitoring financial institutions, particularly as Barclays share price movements reflect both domestic banking trends and international market dynamics.

How Barclays shares have performed in 2025 so far

Barclays shares traded around 325p as of late June 2025, representing approximately 10% year-to-date growth. This upward trajectory follows the bank's exceptional Q1 results, where group revenues reached £7.7 billion against projected £7.33 billion. Despite volatility triggered by US trade policies, Barclays has maintained its position among the stronger performers in the UK banking sector.

Compared to domestic rivals like Lloyds and NatWest, Barclays has demonstrated similar resilience, though with greater sensitivity to international developments due to its significant American operations. The bank's diversified revenue streams have proven advantageous in navigating 2025's complex economic landscape.

Barclays' financial strengths

Several crucial metrics warrant attention when analyzing Barclays' financial health. The bank's Return on Tangible Equity (RoTE) reached 14% in Q1 2025, substantially exceeding its full-year target of approximately 11%. This metric measures how efficiently the bank generates profit relative to its tangible assets.

Equally noteworthy is Barclays' robust capital position, with a Common Equity Tier 1 (CET1) ratio of 13.9% at the close of Q1. This figure sits at the upper end of the bank's target range of 13-14%, indicating strong financial resilience against potential economic shocks.

The following key financial indicators provide insight into Barclays' performance:

• Revenue growth across business divisions (overall up 11% in Q1 2025)
• Net interest margin (expected to exceed £12.5 billion in 2025, upgraded from earlier £12.2 billion forecast)
• Cost-to-income ratio (57% in Q1, below the full-year guidance of 61%)
• Loan loss rate (61 basis points in Q1, reflecting cautious provisions)
• Tangible net asset value per share (372p as of Q1 2025, up from 357p in December 2024)

These metrics collectively indicate Barclays' operational efficiency, profitability, and capacity to weather economic challenges throughout 2025.

Investment banking performance

Barclays' investment banking division has emerged as the standout performer, with income surging by 16% to £3.87 billion in Q1 2025. Fixed income trading demonstrated exceptional strength with a 21% increase, outperforming the average 6% growth recorded among the top five Wall Street institutions.

This impressive performance reflects Barclays' strategic emphasis on investment banking capabilities, particularly following its acquisition of Lehman Brothers' US operations during the 2008 financial crisis. The division's success has been partly attributed to increased market volatility, which has boosted client trading activity and associated fees.

Domestic market developments to monitor

Barclays' UK retail operations posted a 12% increase in income to £484 million and a 23% rise in pre-tax profit to £207 million in Q1 2025. This growth has been partially fueled by the strategic acquisition of Tesco Bank, expanding Barclays' domestic footprint in consumer banking.

The UK banking landscape continues to evolve rapidly, with digital challengers gaining market share. Barclays maintains a substantial customer base, ranking among the most popular UK banks with approximately 48 million customers globally. However, digital challengers like Starling and Monzo consistently outperform established institutions in customer satisfaction metrics.

Impact of Trump's tariffs and economic policy

Barclays' substantial American presence creates unique exposure to US economic policies. In response to growing economic uncertainty stemming from global trade tariffs, Barclays has set aside an additional £91 million against potential future losses, primarily within its US consumer bank and investment banking operations.

The bank's US consumer business has shown encouraging progress, delivering a 9.1% return on tangible equity in 2024, up from 4.1% in 2023. Income at this unit increased by 1% to £864 million in Q1 2025, though profit before tax declined by 7% to £55 million.

Key US-related factors affecting Barclays include:

• Potential escalation or resolution of trade tensions between major economies
• Impact of tariffs on corporate client activity and investment banking transactions
• Consumer behavior in response to economic uncertainty
• Federal Reserve monetary policy decisions and their influence on banking margins
• Regulatory changes affecting international banking operations in the US market

Dividends and buybacks to monitor

Barclays declared a full-year dividend of 5.5p per ordinary share for 2024, payable in April 2025, bringing the total 2024 dividend to 8.4p per share. This reflects a dividend yield of approximately 3.4%, positioning Barclays competitively within the UK banking sector.

In February 2025, the bank announced a share buyback program of up to £1 billion, following the completion of two buyback initiatives in 2024 totaling £1.75 billion. More ambitiously, Barclays has outlined plans to return at least £10 billion of capital to shareholders between 2024 and 2026 through a combination of dividends and share buybacks, with a stated preference for buybacks.

Announcements regarding additional buyback authorizations and any adjustments to dividend policy serve as indicators of the bank's financial trajectory.

Key developments to track in 2025

The ongoing Financial Conduct Authority (FCA) investigation into historical motor finance commission arrangements represents a significant regulatory issue. Barclays has set aside £90 million to cover potential redress, though the ultimate financial impact remains uncertain pending the FCA's final determinations.

Discussions continue regarding potential modifications to post-financial crisis ringfencing rules, which separate consumer lending operations from investment banking activities. Barclays' CEO has expressed support for the existing regulatory framework, suggesting the bank has adapted its business model effectively to these requirements.

Price targets and expert opinions for 2025-2026

According to recent compilations, the consensus analyst price target for Barclays stands at approximately 360p. Individual targets range from a low of 230p to a high of 405p, reflecting divergent views. Of 16 analysts covering the stock, the majority maintain buy or outperform ratings, with Barclays trading at a forward price-to-earnings ratio of approximately 7.4 for 2025, below many UK and international banking peers.

Five key events for Barclays investors to watch in 2025

The remainder of 2025 features several critical events that may significantly influence Barclays' share price trajectory:

• Q2 and Q3 earnings releases (July and October 2025) – particularly focusing on investment banking performance
• Bank of England monetary policy decisions – impact on net interest margins
• FCA determinations regarding motor finance compensation
• Strategic updates on cost efficiency programs – the bank targets £0.5 billion in gross cost savings for 2025
• Further announcements regarding capital return initiatives

These events will provide crucial insights into Barclays' operational performance, regulatory challenges, and capital allocation priorities.

Conclusion

Barclays enters the second half of 2025 with considerable momentum, having delivered strong financial results amid challenging market conditions. The bank's diversified business model spans retail, corporate, and investment banking across multiple geographies, providing natural hedges against sector-specific or regional downturns.