LONDON—Barclays PLC on Wednesday scrapped its dividend target to retain capital as part of a fresh effort by Executive Chairman John McFarlane to reshape the beleaguered British bank.

The move came as the lender reported a sharp rise in second-quarter net profit to £ 1.15 billion ($1.8 billion) from £ 161 million in the same period last year.

Mr. McFarlane also said Barclays would move faster in plans to shed noncore assets, but held off for now from any major changes at its investment bank, saying he was "personally pleased" by the division's recent progress.

Second-quarter revenue at Barclays's investment bank was flat at £ 2.15 billion but lower restructuring costs helped push the unit to a 35% pretax profit in the period.

Mr. McFarlane, who fired Antony Jenkins as chief executive earlier this month and is temporarily running the bank, said the lender would maintain a 6.5 pence a share dividend this year to help keep its capital strength up. He abandoned earlier payout targets of 40% to 50% of earnings, saying the bank "will aim to maintain a sustainable and progressive dividend policy."

The strategic plans announced Wednesday were made three years into a prolonged period of transition at Barclays after an era of high returns from its once-huge investment bank was ended by rising capital requirements and the exit of former CEO Bob Diamond.

Mr. Jenkins proved to be a stopgap CEO, helping the bank improve its culture and standards but never fully convincing shareholders or analysts that Barclays had figured out how to adapt to a changed banking industry.

Write to Margot Patrick at margot.patrick@wsj.com

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