Barclays Set to Report Q2 Earnings: Here's What You Should Know
In the last reported quarter, an increase in revenues, driven by a solid investment banking (IB) performance, and a strong balance sheet supported the results. However, the company recorded a rise in credit impairment charges and operating expenses.
The Zacks Consensus Estimate for the company's second-quarter earnings is pegged at 50 cents per share, which has been unchanged in the past seven days. The estimate indicates a rise of 19.1% from the year-ago quarter's reported number.
The consensus estimate for sales is pegged at $9.35 billion, implying 17.2% year-over-year growth.
Major Factors Expected to Impact Barclays' Q2 Results
Investment Banking Revenues: Global mergers and acquisitions were more impressive than previously expected in the second quarter of 2025. Markets plunged in early April after Trump announced sweeping tariffs, rattling business confidence. But as trade demands eased and policy direction became clearer, deal-making activities resumed in the last month of the quarter. Thus, advisory fee growth is likely to have been decent for BCS.
Further, the IPO market saw a resurgence, with a significant increase in both the number of IPOs and the amount of capital raised. This was driven by several factors, including strategic tariff pauses and positive economic data, which resulted in a rebound in market sentiment. Further, global bond issuance volume was decent. Thus, Barclays is expected to have witnessed decent growth in equity and debt underwriting fees.
Hence, growth in IB revenues is likely to have been robust in the to-be-reported quarter.
Trading Revenues: Client activity and market volatility were solid in the second quarter. The continued tariff-related uncertainty drove client activity. Volatility was high in equity markets and other asset classes, including commodities, bonds and foreign exchange.
Given the solid volatility and higher client activity, Barclays' trading business performance is expected to have been robust.
Net Interest Income (NII): In the second quarter, the central banks globally continued to exhibit a mixed approach to interest rate adjustments, similar to the first quarter. This reflected divergent perspectives on the economic outlook, with some central banks prioritizing inflation control while others focused on potential economic downturn. These are likely to have resulted in the stabilization of funding costs for Barclays and a decent rise in loan demand.
Thus, BCS's NII is expected to have improved in the to-be-reported quarter.
Expenses: Barclays' cost-control measures have been leading to improved efficiency and a lower cost-to-income ratio. In the to-be-reported quarter, expenses are expected to have been manageable as business restructuring initiatives offered support.
Barclays' Key Q2 Development
In April, Barclays and Brookfield Asset Management entered a long-term strategic partnership to enhance and transform Barclays' payment acceptance business, which was previously referred to as the merchant acquiring business.
Barclays intends to inject roughly £400 million into the business, the majority of which will be invested in the first three years of the partnership. Brookfield will offer expertise to aid this transformation and will receive a financial incentive tied to the performance of the business.
The move will enable Barclays to realize value from the business over time. After three years of the partnership, Brookfield may buy nearly 70% ownership interest in the business at market value determined at the time of sale.
Upon the sale of the business, Brookfield's initial financial incentive will be converted into an additional 10% stake in the business, increasing the total Brookfield stake to about 80%.
Barclays will continue to keep the ownership interest of approximately 20% and will use the 'Barclaycard Payments' brand. Further, it will act as the sole payment acceptance services provider to Barclays' clients for a minimum of 10 years.
What the Zacks Model Unveils for Barclays
Our quantitative model does not conclusively predict an earnings beat for BCS this time. This is because it lacks the right combination of the two key ingredients — a positive Earnings ESP and a Zacks Rank #3 (Hold) or better.
You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for BCS is 0.00%.
Zacks Rank: The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Performance of Barclays' Peers
ICICI Bank Ltd. 's IBN net income for the first quarter of fiscal 2025 (ended June 30) was INR127.7 billion ($1.5 billion), up 15.5% from the prior-year quarter.
IBN's results were driven by increased net interest income, non-interest income and growth in loans. However, higher operating expenses and declines in deposits and provisions were headwinds.
Deutsche Bank DB reported second-quarter 2025 earnings attributable to its shareholders of €1.49 billion ($1.75 billion) against the loss attributable to its shareholders of $143 million in the year-ago period.
This Germany-based lender reported a profit before tax of €2.4 billion ($2.8 billion), up from $411 million in the year-ago quarter.
DB's results were aided by increased revenues and lower expenses. Lower provision for credit losses was another positive.
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