Barclays has announced a significant pivot towards artificial intelligence (AI) as part of its strategy to enhance operational efficiency, following a robust 13% increase in annual profits. The bank’s chief executive, CS Venkatakrishnan, known as Venkat, received a substantial pay package of £15 million, reflecting the bank’s strong performance despite rising costs and future profit forecasts being slightly tempered.
A Focus on Efficiency through AI
In a bid to streamline operations and cut costs, Barclays is prioritising AI technologies. Venkat expressed that AI is not merely about improving efficiency; it is also about transforming the way employees engage with their daily tasks. “The promise of AI is not just efficiency… it frees up time for employees to perform their roles faster and better,” he stated. This strategic focus comes on the heels of the bank’s impressive cost-saving initiatives that have already yielded £700 million in savings during 2025, bringing the cumulative total to £1.7 billion over the past two years.
Looking ahead, Barclays aims to achieve savings of around £2 billion from 2026 to 2028, indicating a strong commitment to optimising its operational framework through advanced technologies.
Executive Pay and Bonus Pool Increase
In conjunction with the bank’s financial success, Venkat’s compensation package has seen a notable increase from £11.6 million in 2024 to over £15 million this year. This rise comes as Barclays reported a bonus pool of £2.2 billion for 2025, marking a 15% increase compared to the previous year. The bank justified this level of incentive funding as a reflection of its overall performance, allowing it to reward employees for their contributions.
Financial Performance Highlights
Barclays posted a pre-tax profit of £9.1 billion for 2025, up from £8.1 billion the previous year, driven by strong income growth across all divisions. Total group income rose by 9% year-on-year, with corporate banking seeing a remarkable 16% increase as businesses deposited and borrowed more funds. Additionally, the investment bank also performed well, recording an 11% rise in income as global financial market activity accelerated.
Despite these gains, total costs for Barclays increased by 5% last year, influenced by the acquisition of Tesco Bank and the bank’s decision to allocate an extra £235 million for a proposed compensation scheme for motor finance customers. This brings the total provision for compensation to £325 million, as Barclays anticipates that the Financial Conduct Authority will likely implement the scheme soon.
Shareholder Returns and Future Outlook
Barclays is also looking to enhance shareholder value, pledging to distribute over £15 billion to shareholders between 2026 and 2028 through dividends and share buybacks. This initiative signals the bank’s confidence in its financial stability and growth potential, even as it navigates the challenges of rising operational costs.
Why it Matters
Barclays’ strategic emphasis on AI is not just a technological upgrade; it represents a broader shift in the banking sector towards innovation and efficiency. As the bank balances rising costs with ambitious profit targets, the integration of AI could redefine operational practices, impacting everything from customer service to internal workflows. The commitment to significant shareholder returns further underscores Barclays’ intent to maintain investor confidence, ensuring its competitive edge in an evolving financial landscape.
