Barclays‘ (LSE: BARC) share price has been going great guns. It’s up 40% in the last 12 months, and 190% over five years. With reinvested dividends, the total return will have topped 200%.

Any investors who wrote off FTSE 100 stocks like this have should think again, as old-school sectors like financials swing back into favour. Barclay isn’t the only UK bank flying. Lloyds, HSBC, NatWest and Standard Chartered have delivered similar performance.

One reason is that they’ve finally escaped the long shadow of the financial crisis. Basically, markets have forgiven the banks for the havoc they wreaked.

Look at the money this bank’s making!

Higher interest rates are even bigger factor. They’ve allowed banks to widen net interest margins, the difference between what they pay savers and charge borrowers. Barclays has been making billions, as pre-tax profits show.

• 2025 – £9.1bn
• 2024 – £8.1bn
• 2023 – £6.6bn
• 2022 – £7bn
• 2021 – £8.4bn

Profits did retreat in 2022 and 2023, but that was due to a US compliance failure, which led to £1.6bn of litigation and conduct charges. Of course, investment bank revenues had their ups and downs, depending on the flow of mergers, acquisitions and IPOs, but the last two years they’ve been strong.

Barclays has rewarded investors both with dividends and share buybacks, and plans to keep doing so, with an emphasis on buybacks. Today, the trailing dividend yield is 1.66%. That’s low for this sector but forecast to hit 2.9% this year, then 3.6% in 2027. 

After such a strong run, the Barclays share price may be prone to idle. Brokers seem to agree. The 18 analysts offering one-year share price forecasts produce a consensus target of 576p. If correct, that would see the shares climb just 11.1% from today’s 518p. Throw in the forecast yield and the total return’s 14%. Not bad, but slower than before.

What’s the risk of this FTSE 100 stock?

While that’s a little disappointing, I’m not really surprised. Especially since we could be heading into choppy economic waters. There’s also a danger the UK government will hike the windfall tax on banks. That will cast a shadow until the Autumn Budget on 28 October.

Barclays recently took a £228m hit relating to a fraud case involving UK property lender Market Financial Solutions. Investment bank income earnings can be highly volatile, as trading and deal-making revenues are cyclical. If interest rates fall at some point, margins will be squeezed, hitting profits. Although right now, they seem more likely to climb.

I’m positive, and so are brokers. Of the 20 giving stock ratings in the past three months, 13 label Barclays a Strong Buy and two more say Buy. None says Sell.

Barclays shares look good value, with a forward price-to-earnings ratio of just 9.9. I think with a long-term view, the FTSE 100 bank is well worth considering today. The only thing stopping me is that I already hold shares in Lloyds, HSBC and NatWest, and don’t want to overdo it.

Should you invest £5,000 in Barclays Plc right now?

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Harvey Jones owns shares in Lloyds, HSBC and NatWest.