Barclays raises investor payouts after record annual profit

  • 2021 profit of 8.4 billion pounds, above expectations
  • Bonus pool increases by 23% as performance improves
  • Ex-CEO Staley’s bonuses frozen pending Epstein dispute
  • Morzaria chief financial officer replaced by deputy Anna Cross

LONDON, Feb 23 (Reuters) – Barclays (BARC.L) reported record annual profit for 2021 and returned £2.5 billion to shareholders through dividends and buyouts as bad debt charges fell and that its investment bank continued its strong recent performance.

The British lender reported pre-tax profit of 8.4 billion pounds ($11.42 billion) on Wednesday, better than analysts’ expectations and nearly tripled from 3.1 billion pounds a year ago. Shares of the bank rose 4% in early trading.

This follows a series of significantly improved results for UK lenders, after HSBC (HSBA.L) reported having more than doubled its annual profit on Tuesday. Read more

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Barclays said it would buy back £1bn of its own shares and pay an annual dividend of 4p per share, which would result in a total payout for the year of £2.5bn when added to payouts previous.

In his first update to investors since taking over as chief executive after Jes Staley’s shock exit in November, CS Venkatakrishnan said he would continue to focus on expanding the investment bank .

Staley left after a dispute with UK financial regulators over how he described his ties to convicted sex offender Jeffrey Epstein. Read more

Barclays said in its annual report that it had suspended all bonus payments from Staley pending the outcome of its dispute with regulators – which it said amounted to nearly 70% of his variable compensation since he was appointed. he joined the bank in 2015 – including a long-term reward that would otherwise have been paid out this year.

Staley still received £2.1million in fixed salary for 2021.

The Barclays bank logo is seen on glass lamps outside a branch of the bank in the City of London financial district in London September 4, 2017. REUTERS/Toby Melville

INVESTMENT BANK REGISTRATION

Venkatakrishnan, known within the bank as Venkat and as Staley is a former employee of JPMorgan (JPM.N), said after his appointment as CEO that the lender’s investment banking-focused strategy was “the maid”.

Barclays said its investment bank made its biggest profit of £5.8billion, thanks to a 34% rise in advisory fees on deals such as mergers and fundraising, offsetting a drop 16% of market revenues.

Venkat said his other two priorities would be digitization projects such as a “buy now, pay later” consumer finance offering with Amazon in Britain and Germany; and focus on the transition to a low carbon economy.

Despite the improved performance, the lender warned that soaring inflation in its markets would impact its finances.

Barclays said its adjusted costs would be over £12bn this year, partly due to higher pay for its bankers. The lender’s bonus pool for 2021 has increased by 23% to £1.9bn.

However, the improving economic outlook allowed it to free up £700m of cash reserved for bad debts, boosting its profits.

The bank has confirmed that its long-serving chief financial officer, Tushar Morzaria, will step down from the lender, with his deputy Anna Cross due to take over from April. Cross is the first woman to hold one of the bank’s top three roles.

($1 = 0.7357 pounds)

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Reporting by Lawrence White and Iain Withers, editing by John O’Donnell, Louise Heavens and Tomasz Janowski

Our standards: The Thomson Reuters Trust Principles.

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