Barclays profits soar to £11.2bn, but bonuses will be curbed
Barclays will report bumper profits on Tuesday of around £11.2bn but will also reveal that the proportion of revenue paid to its investment bankers in salary and bonuses will be cut to stave off public anger.
John Varley, the bank's chief executive, is expected to announce that pre-tax profit soared to £11bn – the highest level of any European bank. This includes a one-off £6.2bn profit made on the sale of Barclays Global Investors to Blackrock last year but also reflects strong performances by the retail and investment banking divisions. Bob Diamond, the Barclays Capital boss, is likely to collect about £20m from the BGI sale.
Mr Varley, who told the Treasury Select Committee last week that banks must be allowed to make money however "unpalatable", is said to want to show the bank is sympathetic to the public mood even though Barclays did not directly participate in the Government's bailout. This has prompted Barclays to reduce salaries and bonuses to Barclays Capital staff to around 38 per cent of revenues, down from last year's 44 per cent. Typically, compensation to investment bankers is about half of revenues but most big banks, including US houses such as Goldman Sachs and JP Morgan, have cut back to reflect disquiet among shareholders as well as the public.
To comply with the latest G20 principles on pay, Barclays has deferred up to 60 per cent of bonuses for senior staff over three years – to be clawed back should profits turn to losses – while top executives will have 100 per cent of bonuses deferred for three years. However, some staff have received backdated pay increases to make up for the changes.
One analyst said: "We expect Barclays to pay out between £3bn and £4.5bn to be shared between 23,000 staff. What is so ironic is that the banks should be rather pleased to be paying less. It helps them all if the market rate falls back." Shares in Barclays were down by 6 per cent last week to 262p.
The Government-owned RBS, which reports next week, has still to decide on bonuses. An RBS source said it wants to strike the right note on its bonus pot – estimated at £1.3bn, about 30 per cent of revenue: "We don't want to lose staff by paying less than the market rate but nor do we want to irritate the taxpayer."
- 1 'Sickening, deluded and unforgivable': Bloody attack brings terror to capital’s streets
- 2 Mothers' diets may harm IQs in two-thirds of babies
- 3 Gay couple beaten in park urge MPs to moderate language on gay marriage
- 4 After woman sells virginity for $780,000, here are the results of our prostitution survey
- 5 Far-right French historian, 78-year-old Dominique Venner, commits suicide in Notre Dame in protest against gay marriage
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Win anything from gadgets to five-star holidays on our competitions and offers page.