Barclays sparks anger over bonuses

 

Barclays was accused of ignoring anger over bonuses and running
"business as usual" as it revealed a £1.5 billion pot for investment
bankers today.

A 32% cut to the bonus pool at Barclays Capital in 2011 was in line with a 32% fall in profits at the investment arm and did not signal the change required, major shareholder group the Association of British Insurers (ABI) warned.

Providing more disclosure on bonuses in its annual results than previously, the bank said the average bonus for staff at Barclays Capital was cut by 30% to £64,000 in 2011 while the group's total bonus pool was down 25% at £2.2 billion.

However, chief executive Bob Diamond refused to be drawn on questions about his own bonus, amid reports he could be in line to receive a £3 million payout.

Robert Talbut, ABI investment committee chairman, said: "Whilst overall bonus levels at Barclays have been reduced, for Barclays Capital, this reduction is only in line with the fall in profit before tax. This appears to be very close to business as usual.

"It is not the signal of the change required in order to improve the investment case."

In response, Mr Diamond said: "We stay close with our shareholders and they are very supportive."

Addressing the wider issue of bonuses, the American banker said: "We need to balance remaining competitive with being responsive to the public mood."

The bank's moves to cap and slash bonuses were not enough to appease unions and anti-poverty campaigners as "serious questions exist about the moral backbone of those running the financial service sector".

The results come after weeks of conflict over bankers' bonuses, in which Royal Bank of Scotland chief Stephen Hester turned down his £963,000 bonus amid mounting pressure and Lloyds boss Antonio Horta-Osorio waived his payout following a leave of absence.

Asked if Mr Hester was right to waive his bonus given the current climate, Mr Diamond again refused to comment.

Barclays, which reported pre-tax profits of £5.9 billion for 2011, down 3% on the previous year, said it introduced a cap on the cash part of bonuses for investment bankers at £65,000.

The results said annual incentives for executive directors and the eight highest paid senior executive officers were down 48% compared to 2010 on a like-for-like basis, though Mr Diamond would not confirm how his own pay fitted into this decline.

But he confirmed Barclays would reveal the pay of the top eight highest paid staff at the bank when it publishes the annual report in mid-March.

Mr Diamond said the mood surrounding the industry was not positive but the private sector would only deliver much-needed growth to the wider economy with a "confident" banking sector.

David Fleming, Unite national officer, said: "The announcement on bonuses today by Barclays is yet another illustration of the banking sector continuing to ignore the public outrage and disgust at their behaviour."

David Hillman, spokesman for the Robin Hood Tax campaign, said: "Bob Diamond can only be hiding his bonus because he fears it will look unreasonable to most ordinary people. His potential pay package alone would keep hundreds of nurses and teachers in jobs."

Mr Diamond hailed Barclay's business lending record in 2011 as it beat the Project Merlin targets drawn up between Britain's top five banks and the Government.

Barclays delivered £43.6 billion of gross new lending to UK businesses, including £14.7 billion to small and medium-sized enterprises, exceeding its Merlin target by 13%.

"We really got on our horses to get businesses going," Mr Diamond said and later added: "We don't need Project Merlin - lending is what we do."

The improved lending figures came as the business revealed income growth in every division but investment arm BarCap.

The UK retail and business banking division, where customers increased by 3% to 760,000, saw pre-tax profits increase 60% to £1.4 billion, after stripping out the division's £400 million charge for mis-selling payment protection insurance (PPI).

The number of current accounts increased by 2% to 11.9 million, savings accounts were up 5% to 15.1 million, while mortgages increased 2% to 930,000.

Credit card business Barclaycard saw net operating income increase 21% to £2.8 billion, while pre-tax profits were up 53% to £1.2 billion, excluding the division's £600 million PPI hit.

Meanwhile, the bank slashed its bad debts by 33% to £3.8 billion and cut its debt exposure to struggling eurozone countries Portugal, Italy, Ireland, Greece and Spain by 14% to £7.1 billion.

Barclays shares were 3.5% higher after the results were published, but did dip into the red earlier in the session after it said it would hit its target to generate a return on equity of 13% later than 2013, after reporting a ratio of 6.6% last year.

BarCap saw pre-tax profits drop 32% to £2.96 billion in 2011 as market turmoil, sparked by recession and debt contagion fears in the eurozone, increased throughout the year.

The quarter-by-quarter breakdown at the division shows profits falling from £1.3 billion in the first three months of the year to £267 million in the fourth quarter.

Ian Gordon, analyst at Investec, said: "Bob Diamond's track record is unrivalled but today is not his finest hour."

He added: "It is BarCap's dominance of the group and the weak external environment that render the resilient performance across retail and business banking almost irrelevant."

PA

Suggested Topics
Start your day with The Independent, sign up for daily news emails
Arts and Entertainment
Buttoned up: Ryan Reynolds with Helen Mirren in ‘Woman in Gold’
filmFor every box-office smash in his Hollywood career, there's always been a misconceived let-down. Now he says it's time for a reboot
News
people
News
Actress Julianne Moore wins the Best Actress in a Leading Role Award for 'Still Alice' during the 87th Annual Academy Awards in Hollywood, California
people
Sport
Ross Barkley
footballPaul Scholes says it's time for the Everton playmaker to step up and seize the England No 10 shirt
News
'We will fix it': mice in the 1970s children’s programme Bagpuss
science
Life and Style
2 Karl Lagerfeld and Choupette
fashion
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Graduate Recruitment Resourcer

£20000 per annum + commission: SThree: Sthree have an exciting opportunity for...

Recruitment Genius: Telesales Executive - OTE £32,000+

£18000 - £32000 per annum: Recruitment Genius: A Telesales Executive is requir...

Ashdown Group: Marketing Manager - B2B, Corporate - City, London

£45000 - £50000 per annum + benefits : Ashdown Group: A highly successful, glo...

Neil Pavier: Commercial Analyst

£50,000 - £55,000: Neil Pavier: Are you a professionally qualified commercial ...

Day In a Page

War with Isis: Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria's capital

War with Isis

Iraq declares victory in the battle for Tikrit - but militants make make ominous advances in neighbouring Syria
Scientists develop mechanical spring-loaded leg brace to improve walking

A spring in your step?

Scientists develop mechanical leg brace to help take a load off
Peter Ackroyd on Alfred Hitchcock: How London shaped the director's art and obsessions

Peter Ackroyd on Alfred Hitchcock

Ackroyd has devoted his literary career to chronicling the capital and its characters. He tells John Walsh why he chose the master of suspense as his latest subject
Ryan Reynolds interview: The actor is branching out with Nazi art-theft drama Woman in Gold

Ryan Reynolds branches out in Woman in Gold

For every box-office smash in Ryan Reynolds' Hollywood career, there's always been a misconceived let-down. It's time for a rethink and a reboot, the actor tells James Mottram
Why Robin Williams safeguarded himself against a morbid trend in advertising

Stars safeguard against morbid advertising

As film-makers and advertisers make increasing posthumous use of celebrities' images, some stars are finding new ways of ensuring that they rest in peace
The UK horticulture industry is facing a skills crisis - but Great Dixter aims to change all that

UK horticulture industry facing skills crisis

Great Dixter manor house in East Sussex is encouraging people to work in the industry by offering three scholarships a year to students, as well as generous placements
Hack Circus aims to turn the rule-abiding approach of TED talks on its head

Hack Circus: Technology, art and learning

Hack Circus aims to turn the rule-abiding approach of TED talks on its head. Rhodri Marsden meets mistress of ceremonies Leila Johnston
Sevenoaks is split over much-delayed decision on controversial grammar school annexe

Sevenoaks split over grammar school annexe

If Weald of Kent Grammar School is given the go-ahead for an annexe in leafy Sevenoaks, it will be the first selective state school to open in 50 years
10 best compact cameras

A look through the lens: 10 best compact cameras

If your smartphone won’t quite cut it, it’s time to invest in a new portable gadget
Paul Scholes column: Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now

Paul Scholes column

Ross Barkley played well against Italy but he must build on that. His time to step up and seize that England No 10 shirt is now
Why Michael Carrick is still proving an enigma for England

Why Carrick is still proving an enigma for England

Manchester United's talented midfielder has played international football for almost 14 years yet, frustratingly, has won only 32 caps, says Sam Wallace
Tracey Neville: The netball coach who is just as busy as her brothers, Gary and Phil

Tracey Neville is just as busy as her brothers, Gary and Phil

The former player on how she is finding time to coach both Manchester Thunder in the Superleague and England in this year's World Cup
General Election 2015: The masterminds behind the scenes

The masterminds behind the election

How do you get your party leader to embrace a message and then stick to it? By employing these people
Machine Gun America: The amusement park where teenagers go to shoot a huge range of automatic weapons

Machine Gun America

The amusement park where teenagers go to shoot a huge range of automatic weapons
The ethics of pet food: Why are we are so selective in how we show animals our love?

The ethics of pet food

Why are we are so selective in how we show animals our love?