Barclays, HSBC, Lloyds and NatWest have made investors rich, but were the latest results any good?

The UK banking sector has been a fantastic place to make money in 2025. Investors would have enjoyed an average 38% total return including dividends year-to-date across Barclays, HSBC, Lloyds and NatWest.

All four have just reported their latest quarterly results and on the whole, they are doing well and investors are reaping the rewards.

NatWest’s results had the best reaction from the market, with its share price rising 3.5% on the day. HSBC was the outlier as its shares fell after missing profit expectations. Read on to find out more about each bank’s results and the key takeaways.

Source: AJ Bell, Company announcements

Barclays

• Share price movement on day of results: +2.8% (29 July 2025)

It has taken an awfully long time for shareholders to forgive and forget but Barclays is finally earning and paying its way back into investors’ affections, as its share price hit its highest mark since 2008 after a strong set of second-quarter profits.

The April-to-June period was the fourth best quarter for Barclays this decade, as the loan book grew, net interest margins held firm and litigation costs and loan losses remained subdued. Barclays sanctioned both a new £1 billion share buyback and an increased dividend.

Even though Barclays’ shares hit a 17-year high, they are still the most low-rated, or cheapest, relative to the bank’s net asset value (NAV), or book value, within the four big FTSE 100 banks. The others all trade at a premium to NAV, whereas Barclays trades at a modest discount.

This may be due to the lingering perception that Barclays’ investment bank adds to the risk profile of the overall business, thanks to the danger that a bull market could easily give way to a bear market, should something unexpectedly go wrong.

Source: AJ Bell, ShareScope, Data to 30 July 2025

HSBC

• Share price movement on day of results: -2.5% (30 July 2025)

HSBC missed earnings expectations after being dragged down by a $2.1 billion charge on its stake in a Chinese lender. It also stomached extra costs linked to restructuring efforts as relatively new chief executive Georges Elhedery wields the axe across the business.

This outcome means it has now fallen short on earnings expectations for five out of the past six quarters.

The banking group was already exiting certain regions when Elhedery took over, and he’s now tightening the screws and focusing on areas where he thinks HSBC will do best.

Once declaring itself ‘the world’s local bank’, HSBC has recognised that it cannot be a giant on a global basis. Instead, it is now concentrating more on Asia and the Middle East.

While there is logic to this strategy, repositioning HSBC is not a simple task given its size and scale. There are also challenges in its priority regions such as property market weakness in Hong Kong and mainland China.

HSBC announced a new $3 billion share buyback and a $0.10 per share quarterly dividend. Analysts expect HSBC will pay $0.67 per share in dividends for the full year, which equates to 50p per share in sterling. That puts HSBC on a 5.3% prospective dividend yield.

Source: AJ Bell, ShareScope, LSEG

Lloyds

• Share price movement on day of results: +1.3% (24 July 2025)

Despite a shift in the interest rate environment, Lloyds served up better-than-anticipated profit in the second quarter. This suggests the strategy pursued under CEO Charlie Nunn of generating a greater proportion of revenue which isn’t as sensitive to rates may be gaining some traction.

A big driver of profit was an increase in fees from managing customers’ insurance, investments and pensions. Another thing helping the quarterly performance was the release of a tariff-related impairment taken earlier in the year back into the income statement.

Tellingly, despite the better-than-anticipated profit, the company left full-year guidance unchanged. On an underlying basis this was a ‘steady as she goes’ announcement not a ‘shoot the lights out’ one.
Costs were higher, despite ongoing efforts to increase efficiency through digitisation, although this partly reflected the impact of redundancy costs as the bank reduced its workforce.

NatWest

• Share price movement on day of results: +3.5% (25 July 2025)

Unlike Lloyds, which beat expectations but failed to lift guidance, NatWest ticked both these boxes while announcing second-quarter numbers.

A significant increase in the dividend and a further £750 million buyback gave shareholders further reason for cheer.

Having returned to full private ownership, the stabilisers are off for the group and management may now push hard on the pedals, with further acquisitions potentially on the horizon after the recent capture of Sainsbury’s Bank – which has delivered a meaningful bump in customer numbers.

The market will be wary of NatWest becoming too aggressive on this front given its history and the danger of unpicking progress in returning the bank into a profitable and cash generative operation.

NatWest has focused on growing parts of the business less dependent on interest rates, including its wealth management arm, and to simplify the company’s structure. It has also benefited from the Bank of England cutting rates more slowly than anticipated.

Its strong returns could come under scrutiny; with speculation the government is considering a raid on the banking sector to bolster strained public finances.