- Barclays' European rival Credit Suisse meanwhile reported a comparatively weaker performance from its investment bank on Thursday.
LONDON: Barclays has resumed shareholder payouts after a year-long hiatus due to the COVID-19 pandemic, setting expectations other British lenders will follow suit when they report full year earnings in the next few days.
Barclays said it would pay a full-year dividend of 1 pence per share and buy back 700 million pounds ($969.43 million)worth of shares, a vote of confidence in its balance sheet after regulators in December gave the green light for payouts.
The resumption came as Barclays' profit fell by half, much less than forecast as a strong performance by its investment bank offset provisions against bad loans from the economic fallout of the COVID-19 pandemic.
Barclays reported a profit before tax for 2020 of 3.1 billion pounds ($4.29 billion), well above the average estimate of 1.96 billion pounds from analysts' forecasts compiled by the bank.
Barclays' profit was bolstered by a stellar year for its investment bank, which in common with US peers reported strong revenues from its equities and fixed income businesses as customers traded frantically in volatile markets in 2020.
The fixed income, currencies and commodities unit reported a 53% increase in income, as swings in global interest rates and prices of commodities such as oil drove activity.
Equities saw a 31% rise in income while banking fees rose by 8%.
Wall Street banks such as Goldman Sachs and Morgan Stanley also saw fourth-quarter profits sail past analysts' estimates, as coronavirus-induced volatility coupled with the impact of the US elections boosted trading.
Barclays' European rival Credit Suisse meanwhile reported a comparatively weaker performance from its investment bank on Thursday.
Barclays saw impairments from bad loan provisions related to the pandemic dip to 492 million pounds in the fourth quarter, giving a full year total of 4.8 billion pounds.
The lender's consumer, cards and payments division reported a loss for the year of 1.1 billion pounds, mainly due to pandemic-linked provisions.