Banking giant Barclays has revealed an 8% drop in half-year profits, but increased its full-year outlook for a key performance measure and unveiled more returns for shareholders.

The lender reported pre-tax profits of £4.2 billion for the first six months of 2024, down from £4.6 billion a year earlier, but better than expected thanks to a strong performance in its investment bank.

In the second quarter, it saw profits fall 1% to £1.9 billion.

It set aside another £897 million for bad debts in the first half, up from £896 million a year ago, after putting by £400 million in during the second quarter.

But the group raised its net interest income outlook for the full year to around £11 billion, up from the previous guidance for about £10.7 billion, partly on the back of a higher than expected interest rate outlook, with fewer cuts now pencilled in.

It also confirmed plans to buy back another £750 million in shares in the third quarter and boosted half-year dividends.

Group chief executive CS Venkatakrishnan, who is also known as Venkat, said the bank was “making good progress on our three-year plan”.

“We announced a half year dividend of 2.9p per share alongside a share buyback of up to £750 million, with total capital distributions to shareholders of £1.2 billion in respect of the the first half of 2024.”