Barclays PLC

Strong Q3 performance; on track for full-year targets + capital return - Q3 income +3% YoY to GBP 7.4bn; profit before tax +12% to GBP 2.3bn; RoTE 11.7% ( 13.8% YTD ). - Cost-income ratio improved to 62% in Q3 and 57% YTD. - CET1 14.2% (robust). Announced GBP 500m share buyback; YTD distributions GBP 2.8bn (+47% YoY). - EPS +18% YoY in Q3, and management expects 3rd consecutive year of ~20% EPS growth. - Forecast: Group RoTE >12% for the year (already 12.4% last 12 months).

NII/capital engine: structural hedge + UK deposit quality + lending momentum - Group NII grew ~7% YoY in Q3; income profile viewed as more consistent via stable income streams. - Stable income streams now cover 125% of group costs (up from ~100% pre-2024); group NII ~50% of total income since 2023. - UK deposits: ~80% of group deposits are UK clients; Barclays UK retail deposits +3% YoY, with current accounts ~90% of branded retail deposits; deposits supported by relationship-led strategy. - Structural hedge tailwind: average swap rates 4.2% YTD vs 3.5% planning assumption; hedge income expected to grow until at least 2030 (maturing yield disclosure updated). - Forecasts: NII expected to deliver the 2026 group NII target; continued U.K. lending growth (+7% YoY in Q3; mortgages +7% with GBP 11bn gross lending; corporate/business lending +13% YoY, excluding run-off).

Costs: operational leverage is real; 2027 absolute cost path given; 2028 less explicit - Run-the-bank vs strategic spend clearly separated; management stresses efficiencies offset growth/inflation/BAU. - 2026 exit-rate costs: ~GBP 18bn, with ~GBP 18.5bn expected inclusive of provisions/investment (leading to high-50s cost-income target). - 2027 forecast: statutory costs expected ~GBP 18.4bn ( flat/lower run-the-bank costs vs 2026 ), with more than GBP 1.1bn gross efficiency savings in 2027 (vs ~GBP 0.7bn annually in prior two years). - 2028: management reiterated that the bridge/assumptions from 2025 remain consistent with modest cost growth + positive operating jaws, but investors were explicitly seeking more detail on 2028; the call emphasized “positive jaws” more than a new hard number.