British banking giant Barclays slashed its bonus pool by a quarter on Friday amid a furious backlash over excessive bankers' pay, and revealed a 16-percent drop in annual net profits. The bank said profit after tax slid to £3.0 billion (3.57 billion euros, $4.74 billion) in 2011 from £3.56 billion in 2010 on slumping revenue at its investment division Barclays Capital.
The bank added that it was reducing its total bonus pot to £2.15 billion, down 25 percent compared with 2010, but trade union leaders said the payouts to Barclays' top staff remained far too large. "I am proud of what our people at Barclays achieved in 2011," the bank's chief executive Bob Diamond said in the company's results statement.
"Against the backdrop of challenging economic and market conditions, we maintained our focus on clients and customers while supporting the real economy, as well as the needs of our shareholders, colleagues and the communities in which we operate. "As a result, we have delivered a strong set of results, both financially and in terms of our execution priorities," added Diamond, whose precise bonus will be disclosed in Barclays' annual report due next month. Reports said he would receive up to £3.0 million for his work in 2011 plus millions more under incentives linked to long-term performance.
US national Diamond, who oversees a bank that employs around 141,000 staff world-wide, said on Friday that Barclays needed "to be responsive to the public mood" over bonuses. But trade union bosses were scathing. "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," said David Fleming, a senior official at the Unite union. "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."
Barclays has capped the cash element of bonuses for its investment bankers at £65,000. This compares to £2,000 at Britain's state-rescued banks Royal Bank of Scotland (RBS) and Lloyds Banking Group (LBG). Staff at all the banks are however receiving additional incentives in shares. Despite avoiding a state bailout at the height of the financial crisis, Barclays has also faced political pressure to clamp down on excessive bankers' pay. At RBS, which is 82-percent owned by the taxpayer after a multi-billion-pound bailout, chief executive Stephen Hester was forced to waive his £963,000 annual bonus under pressure from Prime Minister David Cameron.
Barclays added on Friday that its pre-tax profit fell 3.0 percent to £5.88 billion, with underlying earnings at Barclays Capital slumping by a third. It also said that its total exposure to sovereign debt in troubled eurozone nations Greece, Italy, Ireland, Spain and Portugal dropped to £7.1 billion in 2011 from £8.2 billion the previous year. Barclays raised its core tier one ratio, or buffer against future financial crises, to 11.0 percent from 10.8 percent - above the 9.0 percent level requested by the EU's banking regulator by June of this year.
Comments
Comments are closed for this article.