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Barclays has announced a plan to return £10bn to shareholders over the next three years and rein in costs as chief executive CS Venkatakrishnan attempts to revive the UK bank’s languishing share price.
In a series of changes set out on Tuesday, Barclays also said that it would shake up its corporate structure, establishing five new divisions spanning retail banking, wealth management and investment banking.
The plans are part of the first major strategy update at Barclays since 2016, a period in which the group’s investment bank has expanded rapidly without helping the bank’s share price.
The £10bn capital return will come via share buybacks and dividends, with the bank preferring buybacks. Barclays returned £3bn to shareholders last year.
“Our new three-year plan, which we will be announcing at the investor update today, is designed to further improve Barclays’ operational and financial performance, driving higher returns, and predictable, attractive shareholder distributions,” said Venkatakrishnan.
Barclays is also planning to keep a tight lid on expenses, aiming for a cost-to-income ratio of 63 per cent this year, down from 67 per cent in 2023. By 2026 it wants the figure to fall to “high 50s in percentage terms”, with total group operating expenses of £17bn, slightly higher than the £16.9bn reported for 2023.
The bank, which has roughly 85,000 employees, is trying to win over investors just as the boost from higher interest rates begins to fade. The Bank of England earlier this month opened the door to cutting interest rates.
Shares in Barclays have fallen by a quarter since Venkatakrishnan took the top job in November 2021.
The bank said on Tuesday that it was aiming for a return on tangible equity of over 12 per cent in 2026, up from an adjusted 10.6 per cent in 2023.
Following the changes, the bank will in future be managed through five divisions: UK banking; UK corporate banking; private banking and wealth management; investment banking; and US consumer banking.
Barclays announced new management for most of those divisions on Tuesday, with the investment bank being co-led by four people.