Barclays PLC beat expectations with a pretax profit of £11.6 billion (US$18.2 billion) last year, potentially the highest for any bank outside China, and said it had started the year well.
The British bank’s profit last year was bolstered by a £6.3 billion gain on the sale of its Barclays Global Investors (BGI) asset management arm.
Earnings were up 92 percent from £6.1 billion in 2008 and beat the average forecast of £11.2 billion from a Thomson Reuters IBES poll of 20 analysts.
Barclays said its underlying profit, stripping out the BGI gain, was £5.6 billion, up from £1.6 billion in 2008.
It said it would pay £1.5 billion in discretionary cash payments for last year and a further £1.2 billion of long-term awards that vest over three years and can be clawed back.
“So we have strengthened our capital position, reduced leverage and added to our liquidity buffer,” chief executive officer John Varley said in the statement. “We are, by consequence, both well prepared for any future economic weakness and also able to continue to execute on our strategy as opportunities arise.”
Barclays’ profit was assisted by the sale of its BGI unit to BlackRock Inc in December and by Barclays Capital’s hiring of more than 700 people to boost its European and Asian equities and mergers and advisory services.
Pretax profit at Barclays Capital rose 89 percent to £2.46 billion after it absorbed £1.8 billion of credit losses, the bank said.
“Barclays Capital had a very strong year across all global franchises, in particular as its businesses in North America started to reap the benefits of the Lehman acquisition and integration,” Varley said.
Barclays Capital allocated more in pay and bonuses as a percentage of revenue than Goldman Sachs Group Inc.
Barclays set aside 38 percent of revenue in remuneration for employees in its investment bank, down from 44 percent of revenue in 2008. Goldman Sachs paid 36 percent of revenue, the New York-based bank said on Jan. 21, the smallest amount since the firm went public in 1999.
Average total remuneration per Barclays Capital employee was £191,000, the bank said in an e-mailed statement.
“Many members of the public will again be baying for the blood of the elite Barclays Capital bankers who will be sharing out the new bonus pie,” said Philip Henson, partner and employment specialist at City law firm Bargate Murray. “There will no doubt be a long line of ministers lining up to harangue the bankers; it is an election year after all.”
Financial institutions are under pressure from governments to reduce compensation amid public anger about trillions of taxpayer dollars used to bail out lenders during the credit crisis. Barclays didn’t receive any taxpayer-funded injections.
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