Credit cards hit Barclays for €2bn
Its Barclaycard arm suffered impairment charges of £1.69bn worldwide, the equivalent of 5.7% of outstanding plastic debt.
But the figure was 6% down on the £1.8bn (€2.15bn) hit it took in 2009, when bad debts soared by nearly two-thirds.
The group said the improvement during the past year reflected its focus on risk management, as well as the improving economy.
It added that the extended balances people had on their credit cards had helped boost the money it made through interest charged on the debt by 3% to £2.81bn (€3.36bn). Barclaycard’s 21.7m customers owed a total of £20.9bn (€24.99bn) on their plastic at the end of last year, more than 40% of which was classed as extended balances.
Pre-tax profits at the business rose by 9% to £791m (€946m).
Barclays’ British retail banking business enjoyed a strong year, being one of only a few lenders that remained active in the mortgage market. Outstanding mortgage balances increased by 16% during the year to £101.2bn (€121.03bn), through a combination of the acquisition of Standard Life Bank and high levels of new mortgage lending.
Total advances during the year were boosted to £16.9bn (€20.2bn), giving it a 13% market share.
The acquisition of Standard Life Bank boosted total deposits held for consumers and businesses by 12% to £108.4bn (€129.6bn).
Bad debt charges for the division fell by 21% to £819m (€979m), down from £1.03bn (€1.23bn) in 2009.
Overall, pre-tax profits at the British retail banking arm rose by 39% to £989m (€1.18bn), on the back of strong income growth and lower impairment charges, offsetting a rise in operating costs.
Barclays revealed staff costs jumped by a fifth to almost £12bn last year despite a 12% cut in the bonus pool for investment bankers. In a year when pre-tax profits rose 32% to £6.1bn (€7.3bn), Barclays added the group-wide pot for performance-related awards fell 7% to £3.4bn. (€4bn) It said the staff costs rise was not due to increased pay at Barclays Capital, but partly due to a 7% rise in staff numbers.
The average bonus at Barclays Capital, not including salary, was £104,839 compared with £125,100 a year earlier.
