Barclays chiefs shun bonuses despite rising profits
A 49-percent jump in bad loans weighed on underlying earnings, Barclays said, adding that its chief executive and president had declined a bonus for a second year running in the face of “intense public interest and concern.”
Barclays said net profits surged 114 percent to 9.393 billion pounds (10.807 billion euros, 14.756 billion dollars) last year after the bank sold Barclays Global Investors (BGI) to US asset manager BlackRock in late 2009.
Net profit had stood at 4.382 billion pounds in 2008 for the bank, the first major British lender to report its 2009 earnings.
“The Board considers that the performance of Barclays has been strong” last year, the bank said in its earnings statement.
Barclays chairman Marcus Agius also unveiled a wider pay overhaul across the group to help rebuild public trust in banks.
All bonuses for other top directors will be paid in shares over a three-year period and subject to clawback.
Barclays said it had paid out a total of 2.7 billion pounds in bonuses — 1.5 billion pounds in cash and 1.2 billion pounds in long-term awards.
Barclays share price was up 6.34 percent to 292.6 pence in late trade on London’s benchmark FTSE 100 index, which rallied 1.07 percent to 5,220.88 points.
“With or without the sale of BGI, the figures are extremely impressive,” said Richard Hunter, head of British equities at Hargreaves Lansdown Stockbrokers.
“The performance of (investment unit) Barclays Capital was a core contributor to the profit numbers, whilst the impairment levels appear to be under control.”
Pre-tax profit at Barclays Capital surged 89 percent to 2.46 billion pounds in 2009 after including results from operations bought from collapsed US bank Lehman Brothers.
Barclays Capital has paid employees 38 percent of the unit’s 2009 income, down from 44 percent a year earlier. By contrast, US investment banking giant Goldman Sachs cut its latest compensation ratio to 36 percent from 48 percent.
Barclays on Tuesday added that annual pre-tax profit was up 92 percent at 11.642 billion pounds. That beat analyst expectations of profit totalling 11.31 billion pounds, according to Dow Jones Newswires.
However excluding a 6.331 billion-pound gain from the sale of BGI, profit before tax stood at 5.311 billion pounds, down 13 percent compared with 2008.
Impairment charges for the year jumped 49 percent to 8.07 billion pounds. However the figure was below the bank’s own estimate of nine billion pounds.
Despite the hike in debts written-off, Barclays has successfully avoided state control, unlike rival British banks that were beaten by the global financial crisis and bailed out by the taxpayer.
Barclays in 2008 won a seven-billion-pound capital injection largely backed by Abu Dhabi and Qatar, as it survived the credit crunch without government aid.
But Abu Dhabi has since sold most of its holding, while Qatar’s sovereign wealth fund, the Qatar Investment Authority, has trimmed its Barclays stake.