Barclays cuts bankers’ bonuses after profits fall
<?xml encoding=”utf-8″ ??>
Barclays has cut its bonus pool for its bankers after posting a bigger-than-expected fall in annual profits to £7 billion.
Pre-tax profits at the group slid by about 14 per cent from £8.2 billion a year earlier, missing the £7.2 billion that had been forecast by City analysts. They were knocked by £1.2 billion of credit impairment charges taken during the year to prepare for possible bad loans as the economic environment worsens.
The bank also booked £1.6 billion in litigation and conduct charges, including £966 million for a blunder it discovered last year that meant it had issued about $18 billion more securities in the US than it had permission for from regulators.
As a result, its bonus pool was reduced to £1.79 billion, from £1.94 billion in 2021. To account for the over-issuance debacle the bank also cut by a combined £1 million the annual bonuses and share awards handed to CS Venkatakrishnan, its chief executive; Anna Cross, the finance director; and Tushar Morzaria, Cross’s predecessor.
The FTSE 100 bank is one of Britain’s biggest high street lenders, with a stock market value of about £30 billion. Unlike its rivals Lloyds Banking Group and NatWest, it also has a large US credit card division and a big investment banking business that is one of the few UK players capable of rivalling the titans of Wall Street.
Venkatakrishnan, widely known as Venkat, is being treated for cancer in the US but has said he will remain “actively engaged” in running the business. He said: “We are cautious about global economic conditions, but continue to see growth opportunities across our businesses through 2023.”
Barclays is the first of the UK’s big listed lenders to report annual results for last year, with NatWest set to reveal its figures on Friday and HSBC and Lloyds following next week. They are all expected to have reaped the benefit of rising interest rates over the year, which have allowed banks to boost their net interest margins.
These margins represent the difference between the rates that banks pay to their depositors and the rates they charge on loans. Margins are rising because commercial lenders are not passing base rate increases by the Bank of England in full to their savers. This has angered some customers and drawn the scrutiny of MPs on the Commons Treasury committee.
Pre-tax profits at Barclays’ UK business climbed by 7 per cent to £2.6 billion, while the division’s net interest margin climbed to 2.86 per cent from 2.52 per cent.
