Barclays 2010 profit jumps by 32% to £6.07 billion

Barclays - Stellar Performance in 2010

Barclays – Stellar Performance in 2010

Banking group Barclays reported higher than expected pre-tax profit for 2010 at £6.07 billion, while its employee bonus and other performance related payouts pool dropped by 7% to £3.4 billion.

The bank had reported a pre-tax profit of £4.59 billion for the year 2009 and profit for 2010 is higher than £5.7 billion predicted by a Reuters poll of analysts.

Underlying profit for 2010 was reported at £5.46 billion, a growth of 11% over 2009.

In a statement chief executive Bob Diamond said he will try to accelerate the pace of the bank’s financial performance in an increasingly regulated environment.

“The returns we are currently generating will not be acceptable to our shareholders over the medium term”, said Mr. Diamond.

The profit was partially boosted by smaller provision for bad loans. Provisions declined by 30% over last year to £5.67 billion. However, the current profit is nearly half of £11.6 billion overall profit recorded in 2009, swelled by a £6.3 billion one time gain on the sales of Barclays Global Investors fund management unit to US firm BlackRock.

Talking about the contentious issue of bonus payouts, Mr. Diamond said: “It is the compensation based on the year just ended”.

Total performance based bonuses awarded at Barclays Capital – the investment banking arm, was down by 12% to £2.6 billion. Total payouts – including salaries and bonuses, also dropped for Barclays Capital employees.

Total staff cost across the group was higher by 20% and was recorded at £11.9 billion for the year. Mr. Diamond said that bonus payout will be deferred by three years as required by the new regulations and final payout will be held back till the bank had sufficient reserves.

“We are committed to demonstrating that we are both responsible in our compensation decisions and practices and that we take our regulatory obligations and UK government commitments seriously”, said Mr. Diamond.

The bank proposed a final dividend of 2.5p, taking the total dividend to 5.5p for the year compared to 2.5p paid in 2009.

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