Barclays lifts bonus pool after profit jump

Barclays (BARC.L) has increased the amount set aside for banker pay after a strong first half of 2026. The bank allocated £1.3bn to its half-year bonus pool, compared with £1.0bn a year earlier, an uplift described as nearly 30%. The pool covers annual and deferred bonuses and is expected to continue accumulating through the second half of the year, with final decisions on payouts scheduled by the end of February next year.

Management linked the larger pool to improved earnings. Pre-tax profit reached £3.3bn in the second quarter of 2026, a 31% increase year-on-year, while half-year pre-tax profit rose 17% to £6.1bn. The stronger results provided the financial capacity for higher variable compensation as well as capital returns to shareholders.

A key driver of the improved profitability was the investment bank. Revenue from equities trading rose 45% year-on-year in the second quarter, highlighting robust client activity and market conditions. Overall, the investment bank generated about £4.0bn of total income in the period, supporting group earnings.

The better trading performance helped the group exceed prior expectations and strengthened its outlook. With higher income from markets activities feeding through to profit growth, the bank positioned itself to adjust both its remuneration and its forward financial targets.

Alongside the earnings update, Barclays (BARC.L) announced a new share buyback of £1.0bn. The bank also declared dividend distributions of around £800m, with the dividend per share raised to 5.9p. These actions reflect management’s decision to return a significant portion of profits to shareholders.

Barclays also revised its longer-term targets. The group upgraded its 2026 income goal to approximately £31.5bn, from around £31bn previously. The updated target signals confidence that the current momentum in revenue, particularly from its investment bank, can be sustained into the medium term.

The expansion of the bonus pool has prompted broader discussion about pay and tax in the banking sector. Executives described the increase in variable compensation as “purely mechanistic,” indicating it follows established pay frameworks tied to performance. They also emphasised that UK banks face higher overall taxation, including employment taxes and VAT, compared with some foreign peers.

The Trades Union Congress responded that the bank’s profit and payout levels show it can afford higher taxes. The contrasting positions highlight ongoing scrutiny of how rising profits, shareholder distributions, and banker bonuses intersect with public expectations over the banking sector’s tax contribution.