Barclays has revealed its profits jumped by 17% over the first half of 2026 as its investment bank cashed in on more dealmaking and activity in the financial markets.
This helped to offset the banking group setting aside more to cover bad debts.
Barclays reported a pre-tax profit of £6.1 billion for the first six months of the year, up from £5.2 billion in the same period a year ago.
This also came in higher than the £5.9 billion that most analysts had been expecting.
Barclays said its balance sheet was boosted by higher income from divisions including its UK bank, which rose by 8% year-on-year to £4.5 billion, and its investment bank, which jumped by 11% to £8 billion.
Greater levels of activity from investors in the global markets and increased income from equities, coupled with higher fees helped deliver a boost for the investment banking arm, Barclays said.
It follows a period of heightened volatility in the world’s financial markets in response to the US-Israel’s war with Iran while there has also been increased dealmaking with a string of buyers snapping up UK-listed firms this year.
Lending balances grew by 5% in the UK year-on-year, largely reflecting higher business lending.
Gross mortgage lending hit £10 billion in the second quarter, up from £7.7 billion in the previous quarter.
However, the banking giant said its credit impairment charges for bad loans increased to £1.4 billion for the half-year period, from £1.1 billion the year before.
This was largely driven by a one-off hit of £228 million relating to a single company affecting its investment banking operations in the first quarter of 2026.
It was understood that this referred to the collapse of UK property lender Market Financial Solutions (MFS) earlier this year amid allegations of fraud.
Forecasts shared by the bank show growth in the UK economy slowing to 0.4% this year, down from the previous projection of 1.5% shared at the end of last year.
Barclays said the forecasts “reflect the volatile trade policies of the US administration and ongoing geopolitical uncertainty but with a more pronounced inflationary backdrop”.
Anna Cross, Barclays’ group finance director, said the bank has not seen the weaker economic outlook affect demand for loans.
“We don’t recognise that in the loan demand that we see, either from corporates or indeed in terms of household demand for lending.
“Actually the second quarter was our strongest ever quarter in terms of gross lending and mortgages – it was a £10 billion quarter.
“So we continue to see good client and customer engagement despite that headline figure.”
Barclays’ chief executive CS Venkatakrishnan said he had met Chancellor John Healey, who was appointed by Andy Burnham last week, and was “very pleased to hear his commitment to growth in every postcode”.
“The UK has been doing well in the context of Europe – our own loan growth in the UK has been very strong,” he said.
“I think it’s important to make those commitments and investments to continue growth across the country and to support industries including the financial services industry, and that’s the language that I have heard, along with a commitment to mind the finances of the country well.
“These are all good things and we are supportive of these policies.”
