Barclays reveals better than expected profits
BANKING giant Barclays lifted a little of the gloom over the sector as it revealed a better-than-expected profit haul of £6.1bn today.
Although the figure was down on the 2007 total, analysts had expected profits for last year to be around £5.8bn, after huge credit-crunch-related write-offs.
The bank, which unlike Lloyds Banking Group and Royal Bank of Scotland, has not had to take money from the Government to shore-up its finances, said it was now looking at its bonus structure amid an on-going row over corporate excess and the credit crunch.
Barclays said that none of its executive directors will receive bonuses for 2008 – a year which saw its shares tumble 69% – and said it is reviewing the way bonuses are paid across the bank.
“For 2009 and beyond, we are reviewing compensation policies and practices to ensure that they evolve appropriately,” Barclays said in a statement.
It said it expects 2009 to be “another challenging year” with credit market losses set to shrink but bad debt charges likely to rise as the recession bites.
But it said it had had “a good start to the year”, with the performance of its Barclays Capital investment bank arm “extremely strong”, and that it plans to restart paying dividends in the second half of this year.
The 2008 profit figure was down from £7.1bn in 2007 and includes a £5bn writedown on toxic assets and bad debts. The profit also included a £2.4bn gains on acquisitions, most related to its purchase of Lehman Brothers’ US business.
Barclays Capital, the driver of Barclays’ profits before the credit crunch slumped 44% to £1.3bn. Profits at the bank’s UK retail business rose 7% during the year to £1.36bn, while Barclaycard saw profits jump 31% to £789m.
