Barclays and Lloyds set to report bumper profits haul as big bonuses make a comeback

New bosses at both Barclays and Lloyds will also be looked to for their thoughts on strategy since taking on the top jobs last year.

It is set to be an impressive slew of results as the rest of the Big Four report, following NatWest’s figures on Friday which revealed operating profits of £4 billion after releasing £1.3 billion in Covid provisions. Figures should be boosted by sharply lower charges for bad debts as borrower defaults proved lower than feared. This will allow major players to release the billions set aside for this in 2020.

Profits have also been buoyed as the UK economy bounced back in 2021, with mortgage borrowing proving lucrative for the retail banks, while buoyant stock markets have helped drive investment banking returns. Barclays reports its figures on Wednesday with what is likely to be its highest profits in decades.

The consensus forecast in the City is for profits of £8.1 billion – up from £3.1 billion in 2020 when £4.8 billion of loan loss charges sent earnings tumbling 30%. Bonus payouts will likely be an area of controversy for the bank, given that they are set to rise considerably on last year’s £1.6 billion combined pool.

Hefty banker bonuses could stoke anger, coming as many Britons are struggling to meet bill payments amid a mounting cost of living crisis.

Lloyds follows with its figures on Thursday, when new boss Charlie Nunn will lay out his new strategy for the retail lending giant as it forecast to report record profits.

He has kept quiet on his plans at the lender since joining last August, and there is much speculation over what changes he will make.

The figures are set to show profits surging to £7.2 billion, up from £1.2 billion in 2020.