Banking giant Barclays has posted record annual profits of more than £11.6bn (€13.3bn) today – triggering huge payouts for legions of its investment bankers.
The profits bonanza is almost double the level achieved in 2008.
The sale of Barclays’ fund management business BGI and a stellar performance from the BarCap investment banking business should be the main contributors to profits.
But after public outrage on pay following the widespread taxpayer support to the financial system, Barclays is likely to say it is cutting its share of revenues paid out to its lowest level for 10 years.
This would follow the example of US banks such as Goldman Sachs, which slashed pay as a share of revenues despite a near 50% jump in pay and bonuses for 2009. It also capped the pay and bonuses of 100 UK-based partners at £1m (€1.15m) in an effort to show restraint amid moves to tackle bonuses on both sides of the Atlantic.
Although Barclays has not taken taxpayer cash to rebuild its finances, raising funds from the Middle East instead, it has indirectly benefited from taxpayer support to the struggling sector.
Chief executive John Varley last week told MPs banks had lost the trust of the public, but added that Barclays had lent far more than the £11bn (€12.6bn) extra to UK households and businesses it pledged at its annual meeting last April.
The results will also be scanned for how much the bank has lent during the year, the level of bad debts racked up – expected to come in at around £9bn (€10.3bn) – and its view of the outlook for the UK over the coming year.