Barclays Earnings: Return on Tangible Equity Above Full-Year Target Despite One-Off Provisions

Key Morningstar Metrics for Barclays

• Fair Value Estimate
  : GBX 435
• Morningstar Rating
  : ★★★
• Morningstar Economic Moat Rating
  : None
• Morningstar Uncertainty Rating
  : High

What We Thought of Barclays’ Earnings

Barclays BARC reported first-quarter return on tangible equity of 13.5%, ahead of its 12.5% target for 2026.

Why it matters: Barclays booked a £228 million provision for its exposure to the lender MFS as well as another £105 million provision related to the motor finance probe. These one-offs weighed on an otherwise good quarter.

• The investment bank benefited from the heightened volatility in equities and also saw strong demand in advisory and equity capital markets. This was partially offset by a strengthening British pound against the US dollar, however.
• The announced share buyback of £500 million for the quarter was below consensus estimates collected by Barclays and tracks below our £3 billion estimate for the full year. That said, our expectation for Barclays’ capital generation and its capital-level targets still allow for a £3 billion buyback, in our view.

The bottom line: We maintain our GBX 435 per share fair value estimate and no-moat rating. Shares are fairly valued.

Key stats: Credit impairments, excluding the provision related to MFS, was within the through-the-cycle loan loss rate of between 50 basis points and 60 basis points. Card delinquencies in the US are also tracking within the range of the past quarters since 2024.