The last 12 months have been exceptional for Barclays (LSE:BARC) shares. Like many businesses in the British banking sector, Barclays’ share price has been on a bit of a rampage, climbing by around 73% since April 2025. And when counting the extra returns from dividends, the total profit for investors climbs close to 76%.
In terms of money, that means anyone who put £7,500 to work this time last year is now sitting on a chunky £13,200 today – roughly £2,800 more than what passive index investors have earned over the same period.
So, what’s behind this impressive outperformance? And will this momentum continue throughout the rest of 2026 and beyond?
Why is Barclays dominating?
As previously highlighted, the whole of the UK banking sector has been raking in big profits of late.
With the Bank of England cutting interest rates, the amount of money paid out to depositors has been steadily dropping. But thanks to clever interest rate hedges, banks like Barclays, Lloyds, NatWest, and others continue to benefit from higher rates on the lending side of their businesses.
The result is an expansion of net interest margins and a higher return on tangible equity (RoTE) across the sector.
But with earnings growth and RoTE surpassing expectations, Barclays appears to be significantly outpacing its rival banks. And this industry-beating trajectory has only been further supported by its lower level of exposure to the motor finance scandal currently undergoing a redress scheme by the FCA.
Where things stand in April 2026
Despite the strong bull run, Barclays shares are still only trading at a forward price-to-earnings ratio of 7.8.
That’s firmly below the wider industry average of 10.4, suggesting that the stock could have further to climb. And this upward trajectory is only being supported by the firm’s massive £15bn dividend and share buyback programme running until 2028.
Having said that, there may be some justified room for caution. Fragility within the private credit market has started to materialise, and the bank remains exposed to a still weakened UK macroeconomic landscape.
While the temporary ceasefire between Iran and the US has provided some welcome relief, a re-escalation of hostilities risks more persistent energy inflation. And such a scenario doesn’t bode well for the UK or US economies that Barclays is exposed to, leading to a potential deterioration of its loan books.
Time to consider buying?
There’s no denying that Barclays shares remain exposed to some considerable macroeconomic risk factors.
However, the bank’s underlying fundamentals put it in a relatively solid position to absorb some of the impact if the worst-case scenario of a recession comes along. And with the share price seemingly already pricing in the possibility of an economic slowdown, investors may indeed be looking at an attractive entry price for this high-quality bank.
That’s why I think, even after already enjoying a strong rally, considering Barclays shares within a balanced and diversified portfolio could be a prudent move.
