After a record year earnings, Barclays boosts investor payouts

After a record year earnings, Barclays boosts investor payouts ...

  • 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, February 23 - Barclays reported a historic annual profit for 2021, yielding 2.5 billion pounds to shareholders via dividends and buybacks, as bad loan charges fell, and its investment bank continued its remarkable recent performance.

On Wednesday, the British lender 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 stock grew 4% in early trading.

Following a run of shocking improvements for British lenders, HSBC reported it had more than doubled its annual earnings on Tuesday.

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 it added to previous payouts.

C.S. Venkatakrishnan gave his first update to investors following the departure of Jes Staley in November.

After a disagreement with British financial regulators, Staley was left feeling his connection to Jeffrey Epstein, a convicted sex offender.

Barclays said in its annual report that its all Staley's bonuses had been suspended pending the outcome of his trade with regulators which it claimed constituted about 70% of his variable pay since he joined the bank in 2015 as well as a long-term award.

Staley has still received 2.1 million pounds in fixed income for 2021.

REGARD OF THE INVESTMENT BANK

After his appointment as CEO, Venkatakrishnan, who is known outside the bank as Venkat and like Staley, indicated after his appointment that the lender's investment banking-focused strategy is "the right one."

Barclays said its investment firm achieved its greatest ever profit of 5.8 billion pounds, owing to a 34% increase in fees paid by advising on deals such as mergers and fundraising, resulting in a 16 percent decrease in markets income.

Venkat said his other two priorities would be digitization projects such as a "buy now, pay later" consumer financing scheme with Amazon in Britain and Germany; and focusing on the transition to a low carbon economy.

Despite the improvement, the lender has issued a warning that rising inflation on its commodities will impact its finances.

The lender's bonus pool for 2021 increased by 23% to 1.9 billion pounds, according to Barclays.

The improvement in the economic forecast meant that it might release 700 million pounds of cash for bad loans, boosting its earnings.

Tushar Morzaria, a long-standing chief financial officer, has confirmed that his deputy Anna Cross will be a member of the bank from April. Cross is the first woman to take over one of the top three roles at the bank.

($1 = 0.7357 pounds)

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