Barclays’ investment bank will face renewed scrutiny when the group reports its third-quarter figures on 22 October 2026, as investors assess how far chief executive CS Venkatakrishnan’s restructuring plan is on track. The update arrives at a point where trading activity has repeatedly overshadowed Venkat’s stated aim to reduce the division’s dominance within the group, as reported by City AM.
A strategy pulled off course by market turbulence
When Venkat unveiled his restructuring at the start of 2024, he committed to building a ‘simpler, better and more balanced’ bank. Central to that was reducing the group’s reliance on its investment banking arm, which he described as needing to become a ‘smaller part of Barclays’ even as it became ‘higher returning’.
Markets have complicated that ambition. In 2025, the investment bank accounted for 44 per cent of group revenue, driven in large part by trading gains triggered by President Donald Trump’s tariff offensive. Equities income rose 12 per cent to £3.2bn even as traditional deal advisory lagged.
The pattern continued into 2026. In the first half of the year, the division’s income climbed 11 per cent year-on-year to £8bn, with equities income surging 45 per cent to £1.3bn in the second quarter alone as traders capitalised on volatility linked to Middle East conflict. As a result, the investment bank’s share of group income rose to 48.4 per cent, moving further away from Venkat’s goal of a smaller footprint, not closer to it.
Progress on profitability and costs
Behind the headline revenue figures, Venkat’s effort to improve the division’s underlying returns has delivered results. He set out to bring the investment bank’s return on tangible equity (RoTE), a profitability measure comparing net income to the average value of a company’s common equity, into line with a group-wide target of 12 per cent, up from roughly seven per cent in 2023. By 2025, the investment bank’s RoTE had reached 10.6 per cent; in the first half of 2026 it surpassed 15.5 per cent. The division’s cost-to-income ratio improved to 54 per cent in the first half, against 62 per cent in 2025.
The broader ambition is now a RoTE above 14 per cent across the group by 2028, and investors will be measuring the third-quarter results against that target.
Risk-weighted assets (RWA) (a measure of the scale and financial risk of a bank’s loans and investments) represent a second area of focus. Venkat pledged to bring the investment bank’s share of group RWA down to ‘around’ 50 per cent by the end of 2026, a move intended to free up capital for shareholder returns and support the share price. Analysts expect the investment bank will hold around 55.14 per cent of group RWA at the year-end, above that target. In an earlier 2026 update, Venkat was bolder in his promises, stating the share would be reduced to 50 per cent by 2028, a level that internal analysts consider achievable, pencilling in a figure of 50.73 per cent.
Share price recovery and shareholder returns
The original overhaul was partly motivated by a share price that had trailed rivals. Shortly before Barclays announced the restructuring, Qatar’s sovereign wealth fund reduced its stake in the bank, heightening concerns about returns. Since the February 2024 overhaul was unveiled, Barclays’ share price has risen 150 per cent, notwithstanding losses tied to geopolitical turbulence. Barclays has also set out plans to return more than £15bn to shareholders through dividends and buybacks by 2028.
For the third quarter, analysts forecast pre-tax profit of £2.4bn, up from £2bn in the same period a year earlier. Wall Street’s third-quarter results offer a pointer: the US’s six largest banks, JP Morgan, Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and Wells Fargo, together recorded a US$22bn trading revenue haul in the period.
Philip Richards, senior industry analyst at Bloomberg Intelligence, said ‘Barclays and UBS are set to be the outperformers among Europeans.’ Richards added that Barclays’ revenue momentum was expected to ‘remain robust’ in the third quarter, keeping Venkat’s 14 per cent RoTE target ‘within reach’.
Venkat will need to demonstrate at the 22 October update that his grip on longer-term targets has not loosened, even as favourable trading conditions continue to amplify the very division he set out to shrink.
