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10 Feb 2012

Barclays slashes bonuses as profits fall 3 per cent

Barclays has reported a 3 per cent fall in profits last year to £5.9bn. The bank has also slashed the bonus pool for its investment banking arm amid mounting pressure over the payouts.

Barclays reports 3% fall in profits

The bonus pool at Barclay’s investment banking division was cut by 32 per cent to £1.5bn in 2011 due to volatile market conditions.

That saw the average bonus for staff at Barclays Capital cut to around £64,000, compared to a cap of £2,000 at the state-backed banks.

The bank posted pre-tax profits of £5.8bn for 2011, a drop on the previous year.

Chief Executive Bob Diamond refused to be drawn on questions about his own bonus, amid reports he could be in line to receive a payout worth several million pounds.

The results said that annual incentives for executive directors and the eight highest paid senior executive officers were down 48 per cent compared to 2010. 

Read more: Is bashing Barclays bankers justified?

Addressing the wider issue of bonuses, Mr Diamond acknowledged that the mood surrounding the industry was not positive, but said the private sector could only deliver much-needed growth to the wider economy with a “confident” banking sector.

“We need to balance remaining competitive with being responsive to the public mood.”

Mr Diamond’s own bonus will be made public in the company’s annual report in mid-March.

The results come after weeks of pressure over controversial bonus payments which saw Royal Bank of Scotland chief executive Stephen Hester turn down his payout, worth nearly £1m.

Lloyds boss Antonio Horta-Osorio also waived his bonus payout following a leave of absence.

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