Hot topics close

Barclays boosts investor payouts after record annual profit

Barclays boosts investor payouts after record annual profit
Barclays reported a record annual profit for 2021 and returned 2.5 billion pounds to shareholders via dividends and buybacks, as bad loan charges plunged and its investment bank continued its strong recent performance.
  • Summary
  • Companies
  • 2021 profit 8.4 billion pounds, above expectations
  • Bonus pool rises 23% as performance improves
  • Ex-CEO Staley's bonuses frozen pending Epstein dispute
  • CFO Morzaria replaced by deputy Anna Cross

LONDON, Feb 23 (Reuters) - Barclays (BARC.L)reported a record annual profit for 2021 and returned 2.5 billion pounds to shareholders via dividends and buybacks, as bad loan charges plunged and its investment bank continued its strong recent performance.

The British lender on Wednesday reported a pretax profit of 8.4 billion pounds ($11.42 billion), above analyst expectations and nearly tripled from 3.1 billion pounds a year ago. The bank's shares rose 4% in early trading.

It follows a run of vastly improved results for British lenders, after HSBC (HSBA.L) reported it had more than doubled its annual profits on Tuesday. read more

Register now for FREE unlimited access to Reuters.com

Register

Barclays said it would buy back 1 billion pounds of its own shares and pay out a full-year dividend of 4 pence per share, resulting in a total payout for the year of 2.5 billion pounds when added to earlier payouts.

In his first update to investors since taking over as chief executive following the shock exit of Jes Staley in November, C.S. Venkatakrishnan said he would continue his predecessor's focus on expanding the investment bank.

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

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

Staley still received 2.1 million pounds in fixed pay for 2021.

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

INVESTMENT BANK RECORD

Venkatakrishnan, who is known inside the bank as Venkat and like Staley is a former employee of JPMorgan (JPM.N), indicated after his appointment as CEO that the lender's investment banking-focused strategy is "the right one".

Barclays said its investment bank delivered its strongest ever profit of 5.8 billion pounds, thanks to a 34% increase in fees from advising on deals such as mergers and fundraising, offsetting a 16% decline in markets income.

Venkat said his other two priorities would be digitisation projects such as a 'buy now, pay later' consumer finance offering with Amazon in Britain and Germany; and focusing 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 more than 12 billion pounds this year, partly as a result of higher pay for its bankers. The lender's bonus pool for 2021 increased 23% to 1.9 billion pounds.

However, the improved economic outlook meant it could release 700 million pounds of cash set aside for bad loans, boosting its profits.

The bank confirmed that its long-standing chief financial officer Tushar Morzaria will retire from the lender, with his deputy Anna Cross set to take over from April. Cross is the first woman to take up one of the top three roles at the bank.

($1 = 0.7357 pounds)

Register now for FREE unlimited access to Reuters.com

Register

Reporting by Lawrence White and Iain Withers, Editing by John O'Donnell, Louise Heavens and Tomasz Janowski

Our Standards: The Thomson Reuters Trust Principles.

Similar news
News Archive
  • Hangover
    Hangover
    Long COVID could be linked to harsher hangover symptoms, study finds
    10 Mar 2024
    13
  • Masters 2024
    Masters 2024
    The Masters 2024 LIVE: Leaderboard and latest updates as Bryson ...
    11 Apr 2024
    2
  • Greed
    Greed
    MSP hits out at 'greed' following decision to shut Fife post office
    9 Jan 2021
    4
  • Lynn Cohen
    Lynn Cohen
    Sex and the City star Lynn Cohen has died aged 86
    16 Feb 2020
    4
  • Everton vs Burnley
    Everton vs Burnley
    Everton vs Burnley LIVE: Premier League team news, line-ups and ...
    6 Apr 2024
    4
  • The Offspring
    The Offspring
    The Offspring Cover Classic Holiday Song “Please Come Home for Christmas”: Stream
    15 Nov 2022
    1
This week's most popular news