Barclays announces dividend payout and staff bonuses despite profits tumble

The group reported a 48 per cent plunge in underlying pre-tax profits, excluding litigation and conduct charges, to £3.2bn for 2020.

Statutory profits fell 30 per cent to £3.1bn.

However, Barclays unveiled a shareholder dividend payout despite the profits hit, as well as a £1.6bn bonus pool for staff and £1.4m in annual bonuses and incentive shares for boss Jes Staley.

Its results revealed another £492m set aside for expected borrower defaults due to the Covid-19 crisis in the final three months of the year, although this was down nearly a fifth on the previous quarter.

Barclays warned that costs related to the pandemic will remain high throughout 2021.

It added that investment banking trading 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: “Given the strength of our business, we have decided the time is right to resume capital distributions.

“We have today announced a total payout equivalent to 5p per share, comprising a 1p 2020 full year dividend and the intention to initiate a share buyback of up to £700m.”

He added: “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 per cent higher than the £1.5bn shared out in 2019.

It said this 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”.

Mr Staley’s annual bonus awards took his total pay to £4.01m for 2020, although this was down on the £5.9m 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.

However, the Prudential Regulation Authority (PRA) recently allowed lenders to resume paying dividends, giving Barclays and its rivals the green light to resume shareholder payouts.

Mr Staley said despite the loan losses, “2020 demonstrated the value of our diversified banking model”.

Stock market volatility since the start of the pandemic helped drive a 45 per cent surge in revenues to £7.6bn for its markets unit, which trades fixed-income securities, equities and derivatives.

Its consumer, cards and payments division slumped to a £388m loss in 2020 due to the loan losses and wider economic woes.