Barclays UK NIM Expansion Drives Net Interest Income Toward 2026 Goal
Group net interest income outside the investment bank and head office climbed 12% to £3.4 billion, with management pointing to guidance of more than £13.5 billion for the year [5].
Barclays (BCS), the UK-based lender spanning consumer banking, a US credit-card business and a global investment bank, said net interest income excluding its Investment Bank and Head Office units rose 12% to £3.4 billion, with the Barclays UK retail arm contributing £2.0 billion of that total. Management said the run rate keeps the group on track for full-year guidance of more than £13.5 billion at the group level and £8.1 billion to £8.3 billion within Barclays UK.
The underlying driver was margin, not just volume. Barclays UK's net interest margin widened 17bps to 3.72% from 3.55% a year earlier, lifting UK net interest income 9% to £1,986 million as higher structural hedge income outweighed the drag from retail deposit pricing. Loan growth reinforced the trend: group loans and advances at amortised cost rose to £438.6 billion at 31 March 2026 from £430.0 billion at 31 December 2025 and £419.4 billion a year earlier, with UK lending up 5% year-on-year and Barclays UK loans up £1.3 billion to £217.8 billion since year-end, led by mortgages. Group deposits at amortised cost edged up to £587.6 billion from £585.6 billion at 31 December 2025, on growth in the International Corporate Bank, even as Barclays UK deposits fell £0.7 billion to £243.9 billion on seasonal outflows.
Capital return continued alongside the balance-sheet growth. Barclays announced an intended £500 million buyback following completion of the prior £1 billion buyback tied to full-year results, part of a plan to return at least £10 billion to shareholders across 2024 through 2026 and a reiterated target of more than £15 billion over 2026 to 2028. That distribution activity, combined with £5.5 billion of risk-weighted-asset growth tied to UK lending and Global Markets activity, pulled the CET1 ratio down 20bps to 14.1% from 14.3% at 31 December 2025 — 13.9% on a pro forma basis including the newly announced buyback — even as 53bps of accretion came from attributable profit.
Credit costs moved the other direction. Impairment charges rose 28% to £823 million from £643 million a year earlier, pushing the group loan loss rate to 74bps from 61bps; a £228 million single-name impairment in the Investment Bank added roughly 20bps on its own. Management now expects the full-year group loan loss rate to land near the top of its 50-60bps through-the-cycle range. The coverage ratio on loans and advances ticked up to 1.3% from 1.2% at 31 December 2025, reflecting a further £20 million of credit-related management adjustments made amid persistent uncertainty.
Investment Bank income rose 4% to £4,028 million on stronger Global Markets and investment-banking fee revenue, though sterling's strength against the dollar and roughly £40 million of net fair-value lending losses — against a roughly £105 million gain a year earlier — trimmed the gain. The US Consumer Bank grew income 14% to £983 million on business growth and higher purchase activity, again despite the currency headwind. Segment performance diverged elsewhere in the group: the UK Corporate Bank grew income 10% and the US Consumer Bank 14%, while Private Bank and Wealth Management income slipped 1%.
Expense discipline offset some of the credit and currency pressure. The group cost:income ratio improved to 56% from 57%, even as total operating expenses rose 4% to £4,547 million, as roughly £150 million of gross cost-efficiency savings and positive operating leverage absorbed higher investment spending, inflation, and a £105 million increase in the FCA motor-finance redress provision to £430 million.
Returns held up across the franchise. Barclays UK posted return on tangible equity of 19.7%, up from 17.4% a year earlier, while group RoTE came in at 13.5% versus 14.0%, with every division delivering a double-digit return. Tangible net asset value per share slipped to 405p from 409p at 31 December 2025, as EPS accretion and a currency-translation benefit were outweighed by a negative cash-flow-hedging reserve movement, the prior year's dividend payment and share awards vesting. The UK leverage ratio fell to 4.8% from 5.1% as leverage exposure grew £74.0 billion to £1,321.3 billion, mostly on higher Global Markets activity.
Taken together, the results show a bank leaning on UK retail margin expansion and fee growth in its US card business to fund capital return, while absorbing a credit-cost step-up concentrated in a single large exposure. Whether the group loan loss rate settles at the top of its guided range for the full year, as management now expects, will determine how much of that capital-return capacity survives into 2026 to 2028.