Barclays has revealed payouts for shareholders and hefty bonuses for staff and bosses despite seeing annual profits tumble after a £4.8 billion charge for loan losses in the pandemic.
The banking giant resumed dividends with a 1p a share payout and announced a share buyback of up to £700 million thanks to a strong investment banking performance.
Keenly-awaited details on its bonuses also showed that chief executive Jes Staley landed a £1.4 million award, while staff shared out a £1.6 billion pool.
The payouts come in spite of a steep 30% fall in pre-tax profits to £3.1 billion last year.
The results revealed another £492 million set aside for expected borrower defaults due to the Covid-19 crisis in the final three months of 2020, though this was down nearly a fifth on the previous quarter.
Barclays warned that costs related to the pandemic will remain high throughout 2021, but that it expects loan loss charges to be “materially below” last year’s £4.8 billion hit.
A 22% surge in revenues across its investment banking business offset the impact on its retail arm, with its “best ever year” for markets and banking income helping keep the group in profit every quarter.
Mr Staley said that, despite the impact of eye-watering loan losses, “2020 demonstrated the value of our diversified banking model”.
“Given the strength of our business, we have decided the time is right to resume capital distributions,” he said.
“We expect that our resilient and diversified business model will deliver a meaningful improvement in returns in 2021.”
In its annual report published alongside the results, Barclays revealed the staff bonus pool was 6% higher than in 2019, with 448 of its top bankers paid more than £1 million each.
It said the hike represented a “relatively modest increase across the investment banking businesses, reductions for all other businesses and appropriate recognition for the contributions of our more junior colleagues”.
His total pay reached £4.01 million in 2020 thanks to an £843,000 annual bonus and £541,00 in long-term incentive scheme shares, though the total package was down on the £5.9 million paid out in 2019.
Dividends and bonuses are in sharp focus for this year’s bank results season, with handouts set to stoke controversy against a backdrop of economic carnage caused by the pandemic.
Lenders last year scrapped dividends after pressure from the Bank of England.
But in December, the Prudential Regulation Authority (PRA) gave banks the green light to resume payouts, albeit with limits.
NatWest Group will follow on Friday with details of bonus payouts for staff alongside its results.
Mr Staley said he is expecting the UK economy to bounce back strongly in the second half of 2021, thanks to pent-up consumer spending during lockdown.
He added it is “very unlikely” the UK will see negative interest rates given the expected rebound.
Barclays shares fell nearly 3% after the bank received the “cold shoulder” from investors amid disappointment at the size of the dividend and concern over loan losses, according to AJ Bell investment director Russ Mould.
“Attention was drawn by large provisions on Covid-related bad debt and a warning of a continuing impact through the course of 2021,” he said.