Barclays cuts 2011 bonus pool

Banking giant Barclays slashed the bonus pool for its investment banking arm by 32% in 2011 to £1.5bn (€1.78bn0)amid mounting pressure over the controversial payouts.

Banking giant Barclays slashed the bonus pool for its investment banking arm by 32% in 2011 to £1.5bn (€1.78bn0)amid mounting pressure over the controversial payouts.

The average bonus for staff at Barclays Capital was cut by 30% to £64,000 (€76,318) as volatile market conditions saw the powerhouse division's profits slide 32% to £2.96bn.

Meanwhile, the group total bonus pool was down 25% at £2.2bn (€2.62bn) with the average payout for a group employee down 21% year on year to £15,200 (€18,125).

Elsewhere, the bank, which reported pre-tax profits of £5.8bn (€6.9bn) for 2011, down 3% on the previous year, said it had capped the cash part of bonuses for investment bankers at £65,000 (€77,510). This compares to £2,000 (€2,385) at the state-backed banks.

The results come after weeks of conflict over bankers' bonuses, in which Royal Bank of Scotland chief Stephen Hester turned down his £963,000 (€1,15bn) bonus amid mounting pressure and Lloyds boss Antonio Horta-Osorio waived his own payout following a leave of absence.

Chief executive Bob Diamond refused to be drawn on questions about his own bonus, amid reports he could be in line to receive more than £11m (€13.1m) in payouts.

The results said that annual incentives for executive directors and the eight highest paid senior executive officers were down 48% compared to 2010 on a like-for-like basis, though Mr Diamond would not confirm how his own pay fitted into this decline.

Those hoping for a peek at Mr Diamond's pay packet will have to wait until the annual report is published in mid-March.

But addressing the wider issue of bonuses, he said: "We need to balance remaining competitive with being responsive to the public mood."

He said the mood surrounding the industry was not positive but the private sector would only deliver much-needed growth to the wider economy with a "confident" banking sector.

Mr Diamond hailed Barclay's business lending record in 2011 as it beat the so-called Project Merlin targets drawn up between Britain's top five banks and the Government.

Barclays delivered £43.6bn (€52bn) of gross new lending to UK businesses, including £14.7 billion to small and medium-sized enterprises, exceeding its Merlin target by 13%.

"We really got on our horses to get businesses going," Mr Diamond said.

The improved lending figures came as the business revealed income growth in every division but investment arm BarCap.

The UK retail and business banking division, where customers increased by 3% to 760,000, saw pre-tax profits increase 60% to £1.4bn (€1.66bn), when stripping out the impact of the £400m (€477m) charge for compensation for mis-selling payment protection insurance.

The division saw the number of current accounts increase by 2% to 11.9 million, savings accounts were up 5% to 15.1 million, while mortgages increased 2% to 930,000.

David Fleming, Unite national officer, said: "The announcement on bonuses today by Barclays is yet another illustration of the banking sector continuing to ignore the public outrage and disgust at their behaviour.

"Serious questions exist about the moral backbone of those running the financial service sector, while they find it acceptable to ignore the misery working people face with our economy in turmoil.

"The strong results announced today reflect the hard work done by the thousands of low-paid Barclays staff in bank branches, processing and call centres.

"However, there remains an unacceptable disparity between the huge pay awards to the select few at the top of the organisation and the majority of the workforce.

"In 2011 alone Barclays cut 6,000 staff globally, yet its top bankers are today being remunerated with these enormous bonuses. Instead of awarding the bosses outrageous bonuses, the banking sector needs to give something back to our communities.

"Barclays must now realise that cash-rich multinationals need to plough something back into society, instead of simply rewarding one another with fat bonuses."

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