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Barclays’ profits jumped in the last quarter and it handed more cash to shareholders as further bank taxes looms in John Healey’s budget next Wednesday.

The UK lender reported a 12% rise in pre-tax profits to £2.3bn for the three months to 30 September. In the UK, loans grew 7% year on year with particular strength in its corporate business, up 14%.

It announced a new £500m share buyback, bringing the amount handed back to shareholders so far this year to £2.8bn, up 46% year on year.

C. S. Venkatakrishnan, the Barclays chief executive, said:

I am pleased with the ongoing momentum of Barclays’ operational and financial performance. With one quarter to go before the end of our original three-year plan, we have either achieved or are on track to achieve all of our 2026 group targets. We are confident in and committed to the 2028 targets that we laid out earlier in the year. The investment bank delivered strong equities performance, offsetting a challenging environment for FICC [fixed income clearing corporation].

I am pleased with the ongoing momentum of Barclays’ operational and financial performance.

With one quarter to go before the end of our original three-year plan, we have either achieved or are on track to achieve all of our 2026 group targets. We are confident in and committed to the 2028 targets that we laid out earlier in the year.

The investment bank delivered strong equities performance, offsetting a challenging environment for FICC [fixed income clearing corporation].

Barclays’ investment bank reported income of £3.1bn, lower than analysts had forecast. Income from fixed income trading slid 19%, worse than a 5% drop among US banks.

The TUC urged the chancellor to increase taxes on banks at next week’s budget.

The union body wants the government to use the money to pay for a social energy tariff that brings down energy bills by up to £559 a year for those on low and middle incomes.

Last week, when bank stocks were falling amid talk of a hike in UK bank taxes, Angeline Ong, senior technical analyst at investing and trading platform IG, noted:

A UK bank tax risk is now a base case. If it is confirmed on 28 October, it’ll be the size and timing that will be key. If Healey does go ahead, shares of Lloyds and NatWest, which are almost entirely exposed to the UK, would likely be impacted most, and you are seeing this already in the share price reaction today. Barclays is partly exposed. HSBC is least exposed in the mix.

In financial markets, the cost of French government borrowing has increased further, hitting multi-decade highs, and piling pressure on ministers after weeks of increasingly violent street protests.

The yield, or interest rate, on France’s 10-year bonds rose 4 basis points to 5.039%, the highest since July 2002, after breaking through the 5% mark on Wednesday.

The risk premium over German Bunds has widened to 163bps, the widest since November 2011, reflecting investor concerns over France’s fiscal outlook. The government has yet to pass its budget.

Oil prices have climbed above $111 a barrel this morning, after more Houthi attacks in Saudi Arabia fuelled fears over an escalation of the Middle East conflict and further disruptions to supplies.

Brent crude, the global oil benchmark, is up 2.5% at $111.58 a barrel, raising fears of higher inflation, which puts pressure on bonds.

Asian stock markets slid, with Japan’s Nikkei down 2.65%, China’s CSI 300 losing 1.5% and South Korea’s Kospi tumbling 3.7%.

10am BST: UK index-linked gilt 2031 action

11am BST: UK CBI Industrial tends survey

11.50am BST: Bank of England governor Andrew Bailey speech

1.30pm BST: US Initial jobless claims for week of 17 October

3pm BST: Eurozone consumer confidence flash for October

3m BST: US Conference Board leading index for September