Barclays set to report a £5.8bn profit

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The Independent Online

Bob Diamond's highly anticipated first full-year results as Barclays' chief executive are expected to show a 9 per cent increase in the bank's profit to nearly £5.8bn.

However, Mr Diamond is unlikely to comment on his own £9m bonus, which has revived public anger over bankers' pay. The scale of that payout will instead be confirmed when the annual report is published next month.

Excluding the sale of Barclays Global Investors and an accounting convention known as an "own credit charge", the bank made a pre-tax profit of £5.31bn last year. Analyst forecasts for 2010 range from £5.34bn to £6.27bn, with the consensus at £5.78bn.

Mr Diamond is not expected to announce any major changes to the strategy devised by his predecessor, John Varley. This includes an ambition to limit the profit generated by the investment banking division to one-third of the total, although it is still expected to account for around three-quarters this time.

However, Mr Diamond is expected to be tougher on cutting costs. Simon Maughan, a banking analyst at MF Securities, said: "With John Varley, anything that rose above the cost of inflation was blamed on regulatory burden and so, on costs, Barclays was behind its UK peer group. There was a small head count reduction at the end of last year and I suspect we will see Bob Diamond focused on efficiencies across the business."

Mr Diamond's bonus has been one of the big talking points in what has been a rollercoaster week for the banking sector. The Chancellor, George Osborne, stunned the industry on Tuesday by increasing the bank levy by £800m, then followed it by agreeing the terms of "Project Merlin". This industry agreement with the Government has tied the big four banks to an £11bn increase in lending to business next year to £190bn, as well as giving £200m to David Cameron's beloved Big Society Bank. However, banks broadly won the argument over disclosure of bonuses to their best-paid employees, which led to the resignation of the Lib Dem Treasury spokesman, Lord Oakeshott.

The outspoken peer was critical of what he saw as a victory for the banks and agreed to step down after describing the deal as "weak, waffly". Lord Oakeshott has bitten his tongue since then, as he does not want to cause problems for the coalition ahead of the referendum on changing the voting system – a LibDem priority – in May.

It was reported on Friday evening that Mr Diamond has changed the terms of how bonuses are paid to Barclays' investment bankers to better align risk and reward.