UK banks: Where to next for the Barclays, Lloyds and NatWest share price?

​​​Mixed results reflect varied banking strategies

​In a quarter marked by geopolitical uncertainty and shifting monetary policy, the UK's major banks - Barclays, Lloyds and NatWest - delivered performances that reflect both resilience and strategic adaptation.

​The divergent results highlight how different business models and market exposures have created varying outcomes for the UK's leading financial institutions during a period of economic transition.

​The banks’ quarterly results provide insights into how each bank is positioned for the evolving interest rate environment and economic conditions that continue to shape the financial sector landscape.

​The performance variations also reflect different approaches to risk management, lending strategies, and operational efficiency as banks navigate current market conditions while seeking to maximise returns for shareholders.

​NatWest delivers standout performance

​NatWest Group led the pack with a 36% year-on-year (YoY) surge in pre-tax profit to £1.81 billion. This was driven by improved deposit margins and increased loan balances, despite setting aside £189 million for potential bad loans.

​The bank's return on tangible equity (RoTE) reached 18.5%, prompting an upward revision of its full-year guidance to the top end of the 15%-16% range. This exceptional performance demonstrates the effectiveness of NatWest's strategic focus on core domestic banking operations. 

​The strong margin performance reflects NatWest's ability to benefit from higher interest rates while maintaining competitive positioning in key lending markets. The bank's disciplined approach to deposit pricing has helped preserve profitability during the rate cycle.

​Despite the healthy profit growth, the £189 million provision for potential bad loans indicates management's cautious approach to credit quality as economic uncertainties persist and borrowing costs remain elevated for consumers and businesses.

Barclays shows broad-based growth

​Barclays reported a 19% increase in profit before tax, totalling £2.7 billion, supported by broad-based growth across its core operating segments. The bank's diversified business model provided multiple sources of revenue growth during the quarter.

​The bank's investment banking division saw a 28% rise in pre-tax profits, reaching £1.7 billion, driven by a 16% increase in trading revenues. This performance reflects improved market conditions and Barclays' strong positioning in fixed income and equities trading.

​The return on tangible equity stood at 14%, surpassing its 2025 guidance of approximately 11%. This outperformance demonstrates management's ability to execute effectively across both retail and investment banking operations.

​Barclays' investment banking strength provides diversification benefits that have proven valuable during periods when traditional retail banking faces margin pressure or credit quality concerns affecting purely domestic-focused competitors.

Barclays daily candlestick chart

​Lloyds faces operational headwinds

​Lloyds Banking Group faced headwinds, with a 7% YoY decline in pre-tax profit to £1.52 billion, attributed to higher costs and a £309 million impairment charge reflecting changes in the economic outlook.

​Despite this profit decline, the bank experienced strong mortgage lending growth, with a £4.8 billion increase in its mortgage book, driven by a surge in UK homebuyers rushing to benefit from a stamp duty holiday before its end on 1 April.

​The return on tangible equity was 12.6%, supporting management's confidence in reaching approximately 13.5% for the full year. This guidance suggests that first quarter (Q1) challenges may prove temporary rather than indicative of longer-term performance trends.

​The increased impairment charge reflects Lloyds' conservative approach to provisioning amid economic uncertainty, particularly given its significant exposure to UK consumers through mortgages and personal lending products.

Barclays, Lloyds and NatWest analyst ratings and share price performance

​Despite varying Q1 results all three major UK banks have greatly outperformed the FTSE 100.

​Year-to-date the Lloyds share price has risen the most - by an impressive 38% - despite a decline in its pre-tax profits and various headwinds. NatWest and Barclays shares have also risen significantly by between 23%-to-25%, greatly outperforming the FTSE 100’s 6% gain.

​According to LSEG Data & Analytics, Barclays is rated as a ‘buy’ with a 12% upside target for its share price, Lloyds between a ‘buy’ and a ‘hold’ with an 8% expected share price increase, and NatWest as a ‘buy’ with an 11% anticipated long-term rise in its share price (as of 24/06/2025).

Barclays, Lloyds and NatWest LSEG Data and Analytics charts

​TipRanks rates Barclays as a maximum ‘10 Outperform’ and a ‘strong buy’.

Barclays TipRanks Smart Score charts

​Lloyds is ranked as a ‘4 Neutral’ and a ‘hold’.  

Lloyds TipRanks Smart Score chart

​For NatWest TipRanks currently doesn’t provide a Smart Score (as of 24/06/2025).

​Basic technical analysis of the Barclays, Lloyds and NatWest share prices

​The Barclays share price revisited its 316p-to-312.05p support zone but managed to bounce off it amid the Israel-US-Iran ceasefire with the 334.25p early June all-time high being targeted while the 23 May low at 312.05p underpins. The medium-term uptrend will remain intact while this level holds.

​Even though the Lloyds share price managed to remain above its major 74.46p-to-71.96p support zone, it so far remains below its May-to-June downtrend line at 76.96p. It and the mid-June high at 77.66p need to be exceeded, for the bulls to regain control.

​The long-term uptrend remains valid while the 74.46p-to-71.96p support area holds.

​The technical situation is similar for the NatWest share price which on Monday dipped into but on Tuesday bounced off its 498.1p-to-484.3p support region. While it holds on a daily chart closing basis, the medium-term uptrend is deemed to be intact.

​A rise above the mid-June high at 525.0p is needed for the bulls to regain full control and for an attempt to rise above the 537.2p early June high to be made.

​Investment implications for UK bank stocks

​For investors considering UK banking sector exposure, the mixed quarterly results highlight the importance of understanding different business models and market positioning strategies.

1. ​Research the UK banking sector dynamics, interest rate sensitivity, and individual bank strategies to understand investment opportunities and risks.
2. Consider how economic conditions, monetary policy changes, and credit cycles might impact different banks' performance trajectories.
3. Open an account with IG by visiting our website and completing the application process.
4. Access UK banking stocks through our trading platform, including NatWest, Barclays, and Lloyds shares.
5. Implement appropriate diversification and risk management given the cyclical nature of banking stocks and their economic sensitivity.

​Share dealing provides direct exposure to UK bank dividends and potential capital appreciation for investors who believe in the sector's recovery prospects. Spread betting and CFD trading offer flexible approaches for trading around earnings announcements and sector developments.

​Collectively, these results underscore the varied strategies and market positions of the UK's leading banks amid a complex economic landscape. The UK banking sector as a whole seems to be well positioned for further outperformance over the course of the year.

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