After years in the doldrums, the stars may have finally aligned for UK banking shares like Barclays (LSE: BARC). The last few years have been terrific for all the FTSE 100 banks, but the Blue Eagle bank might take first prize.

Taking into account a surging share price and some handsome dividends on top, just how much could an investor have made from Barclays?

Here are the basic details:

• Share price February 2024: 147p
• Share price February 2026: 487p
• Share price increase: 232%
• Dividends paid between February 2024 and February 2026: 16.7p
• Dividends paid as percentage of February 2024 share price: 11.4%
• Total percentage increase between February 2024 and February 2026: 243%

Putting all the pieces together, a £15,000 stake in Barclays in February 2024 would now be worth £51,398. Add a bit extra too, if those dividends get reinvested into the stock.

A good few years then. But can Barclays pull the trick off again?

The good

The bull case is simple: the good times could continue to roll. All the factors that have boosted Barclays over the last couple of years look set to continue.

A good interest rates environment, billions in efficiency savings, and a boost from structural hedging should keep earnings strong in years to come. This point was underscored by the recent announcement of £15bn of capital earmarked for dividends and buybacks – an amount equal to around a quarter of the firm’s market cap.

The firm still looks relatively cheap on valuation terms with a price-to-earnings ratio of 10.7 and a price-to-book ratio of 1.02. Both are below sector averages. Although, it should be pointed out that these figures aren’t quite as bargain basement as they were back in 2024.

The bad

There are negatives here too. The latest data suggests inflation is finally starting to come down. If we start to see inflation at 2% or less then there is a good chance interest rates will be at or close to the 2% target too. This will impact earnings.

The threat of a stock market crash could hurt too. With Barclays’ operations in the US, a correction following the AI madness that’s going on there could be painful. Hundreds of billions are being spent with little return on investment so far. That sounds like a recipe for disaster to me.

And the longer this good run continues, the higher the chance of windfall taxes being imposed in the UK. A one-off tax on banks was mooted for last year’s Budget and I wouldn’t be surprised to hear renewed calls if earnings continue to be strong.

On balance, I think there’s plenty to like here. The terrific run up of the last two years is unlikely to be repeated, but I’d still say this is a stock to consider.