Barclays UK has recorded a 14% increase in income to £2.07bn in its first quarter, driven by "higher structural hedge income" and the acquisition of Tesco Bank.

In its Q1 results, the group’s income totalled £7.7bn, which is an 11% increase year-on-year.

Furthermore, its profit before tax jumped by 19% to just over £2.7bn.

However, across the bank, its operating costs increased by 7% to £4.2bn, reflecting Tesco Bank's costs, further investment and business growth, inflation and a £50m expense for the employee share grant announced in its 2024 results.

This has been offset by £150m in cost efficiency savings.

Group chief executive at Barclays, C. S. Venkatakrishnan, said: "I am very pleased with our performance in Q1 2025, which represents another strong quarter of execution. Compared to Q1 2024, we grew our top line income by 11%, our profit before tax by 19%, our earnings per share by 26%, and delivered a group return on tangible equity (RoTE) of 14.0%.

"Our high quality, diversified businesses, together with proactive risk, capital and liquidity management and a robust balance sheet, position us well to support our customers and clients and deliver strong risk-adjusted returns in a wide range of macroeconomic scenarios."

In its guidance for 2025, Barclays said it expects a RoTE of 11% in the full year, with efficiency savings of £500m set for this period.

The bank also expects its RoTE to be greater than 12% in 2026 and has highlighted an aim of returning at least £10bn of capital to shareholders between 2024 and 2026, through dividends and share buybacks, with a continued preference for the latter.

Financial analyst at Quilter Chevoit, Will Howlett, added: "Barclays has been one of the winners of the recent tariff induced volatility, with a solid set of first quarter results driven by trading revenues in the investment bank ahead of Donald Trump’s announcements earlier this month. Barclays has been on somewhat of a good run of momentum and these results represent a further quarter of progress towards its 2026 targets set out two years ago.

"While Barclays is looking to reduce the reliance on the investment bank and drive growth from other areas, the current market volatility should keep trading activity elevated over the short-term. Pleasingly, the bank has also upgraded its guidance for its net interest income, which given the uncertainty on the path of interest rates just now is good to see.

"Barclays is executing well on its strategy and has some very shareholder-friendly policies in place over the coming 18 months. Given it has momentum but remains undervalued compared to European peers, it looks to be an attractive company is the face of market volatility."

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