Barclays has posted a bigger-than-expected jump in annual profits and confirmed that it had frozen share awards for its former boss after he left over the Epstein scandal.
The bank said its pre-tax profits last year climbed to £8.4 billion from £3.1 billion in 2020, when the bank was hit by loan impairments it took after the start of the coronavirus crisis.
Like other lenders, including HSBC and NatWest, Barclays has been able to release some of the credit provisions it took at the height of the crisis after the bad loans from the pandemic proved to be less severe than feared. It said today that last year’s profits, which were better than the £8.1 billion forecast by City analysts, were boosted by a net impairment release of £700 million. That compared with a charge the previous year of £4.8 billion.
The bank was also buoyed by record profits of £5.8 billion at its investment banking division and announced a £1 billion share buyback, as well as 4p-a-share dividend.
Barclays separately confirmed that Jes Staley, who was its chief executive until he was abruptly replaced by CS Venkatakrishnan in November, was paid £2.1 million last year, down from £4.2 million in 2020. He did not receive any bonuses for the year.
The bank said in its annual report that since joining Barclays in 2015 only 16 per cent of the variable pay that Staley had received in share awards had vested. While a small portion had lapsed without vesting, almost 70 per cent, made up of deferred bonuses and long-term incentives, was yet to vest, and the Barclays remuneration committee has decided to exercise its discretion to suspend all of his unvested awards pending a regulatory investigation into the Epstein affair.
Barclays is one of Britain’s biggest banks that is listed in the FTSE 100. It has an extensive high-street business in the UK as well as a big investment banking arm that competes with the giants of Wall Street.
Staley, 65, had been overhauling the lender ever since he took charge of the group in December 2015, in a revamp that included withdrawing from a host of countries and refocusing it into a transatlantic business. He was previously a veteran of JPMorgan, where he began a professional relationship with Epstein, who was a client of the American group’s private bank.
It emerged in February 2020 that the Financial Conduct Authority (FCA) and the Bank of England’s Prudential Regulation Authority were looking into the way that Staley had characterised his relationship with Epstein to Barclays and the bank’s subsequent description of that relationship to the FCA.
The watchdogs disclosed their preliminary findings to Staley and Barclays in November, when the bank said he would stand down to contest them.
Venkatakrishnan, known as Venkat, is a former colleague of Staley’s from JPMorgan who was hired to Barclays in 2016 and was closely associated with Staley’s overhaul plan for the British bank. He said: “2021 is the year in which Barclays demonstrated the results of the strategy we set out in 2016.”
Barclays also confirmed that Anna Cross, its deputy finance director, would succeed Tushar Morzaria as group finance chief. Morzaria is to retire in April.
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Barclays profits jump to £8.4bn