The high street bank said that its £2.4bn purchase of Kensington Mortgages in 2023 had boosted its “ability to lend to high-yield, low risk loans to customers with complex incomes”. 

Its mix of high loan-to-value mortgages rose to 23% in the period from 14% a year ago. 

The bank added that the purchase of Kensington had allowed it to “reach new customers”, while its management has an expert knowledge of the securitisation markets. 

The bank’s home loans portfolio lifted 4.3% to £169bn in the period, with landlord loans accounting for 10% of its book. 

It added that 48% of its loan book comprised five-year fixed-rate deals, 34% were two-year fixes, with the remaining 18% counting as tracker mortgages, or other fixed-term lending. 

Overall, the bank posted a pre-tax profit down 4.8% to £2.1bn, while group income lifted 9% to £7.2bn from a year ago. 

It launched a £500m share buyback, adding that the business plans to move to a quarterly share buyback with plans to return as part of its plan to return £10bn to shareholders by 2026. 

The lender also lifted the cash it has set aside for motor finance redress by £235m to £325m. 

The move follows suit with Lloyds Banking Group, Close Brothers and Bank of Ireland, who have all upped their provisions. 

AJ Bell investment director Russ Mould said: “Profits of £2.1bn match expectations, despite an additional £235m charge for motor finance compensation and a small uptick in loan losses thanks to two specific items, and management feels confident enough to launch a third share buyback of the year, this time for £500m, to take the total for the year to £2.5bn.

“That strong signal, and maintenance of targets for return on tangible equity for 2025 and 2026, may help to soothe those who had started to fret as US banking shares took a dive after the high-profile failures of First Brands and Tricolor. 

“Barclays shares are now heading back toward the 17-year high reached last month.”

Shares in Barclays rose 4.3% to 380p in mid-morning trading.