Barclays announced a surprise £500 million ($670 million) share buyback and raised its profitability target for 2025, signaling strong confidence in its income growth and cost-cutting measures. The British lender now expects to deliver a return on equity above 11% this year, supported by faster-than-expected savings and consistent capital generation over the past nine quarters, according to CEO C.S. Venkatakrishnan. Shares rose 4% in early Wednesday trading as investors welcomed the move.

Despite the upbeat outlook, the bank’s third-quarter pretax profit fell 7% to £2.1 billion, in line with market forecasts, after setting aside £235 million for a motor finance mis-selling scandal and taking a £110 million hit linked to the collapse of U.S. firm Tricolor. Excluding these provisions, profits were 13% ahead of expectations, analysts said. However, its investment banking division lagged behind Wall Street peers, with deal fees slipping 2% while U.S. rivals recorded double-digit gains.

Barclays’ global markets business grew 15% year-on-year, but the bank’s ranking in global mergers dropped to 14th place for the quarter. A bright spot was its U.S. consumer banking arm, which saw a 19% income jump driven by price hikes and the acquisition of General Motors’ co-branded cards portfolio. Addressing concerns over private credit exposure, Venkatakrishnan said the bank had limited risk, with £20 billion—or 6% of total loans—linked to the sector, 70% of which are in the United States.

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