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Friday, February 10, 2012

Barclays bonus payments report feb 10 2012

Barclays bonus payments report feb 10 2012 ; Barclays announced on Friday that it was capping cash bonuses at £65,000 as it reported a 3% fall in profits to £5.9bn.

Providing more detail about bonuses than usual, the bank said that the value of bonus per group employee was down 21% year on year to £15,200, while the average value of bonus per employee at Barclays Capital, its investment banking arm, was down 30% to £64,000 — just below the value of the cap. Last year the average bonus was £91,000.

The bank said that annual bonuses for executives and its eight highest paid employees were down 48%. Diamond received a bonus in shares of £1.8m in 2010 so, if he is in line with the average, this indicates that his bonus would be around £900,000.

While the bank stressed that in 2011 bonuses were down 26% across the group and down 35% at BarCap compared with 2010, the proportion of revenue used to pay BarCap's 24,000 employees actually rose to 47% from 43% a year ago. Revenue inside the BarCap operation — which Diamond used to run until being elevated to chief executive a year ago — was down 22% and the profits in that operation down 32%.

"Very weak Barcap revenues do most of the damage today," said Ian Gordon, banks analyst at Investec. But shares were up strongly on Friday morning, rising more than 3% to 240p.

The bonus pool in BarCap was down 32% to £1.5bn — but the World Development Movement reckoned this would pay for school meals for two years for the "23 million primary age children who attend school hungry across Africa". Some 20% of the profits generated by the bank — £1.3bn — were generated in Africa. Christine Haigh, campaigner at the World Development Movement, said: "Big bonuses encourage bankers to take big risks, not only with financial stability through their debt-based investment, but also with people's lives".

As a percentage of BarCap's profits, the bonus pool was 35% versus 36% a year ago. The total bonus pool for the bank's 141,000 employees was down 25% at £2.1bn.

The bailed out banks Royal Bank of Scotland and Lloyds Banking Group — where both bosses are not taking their bonuses — are subjected to a £2,000 cap on cash bonuses.

Diamond admitted that its return on equity was just 6.6% in 2011 — down from 8.8% the year before and well below the target of 13% set a year ago.

Diamond said: "We are not satisfied with the return on equity we delivered in 2011 and are committed to delivering steady improvement moving forwards". He refused to drop the target, however, instead refusing to say when it might be met. "13% remains absolutely the right target and its very achievable, but we may not achieve it in 2013 given the impact of the external environment," he said.

He was also unable to say whether net lending to small businesses was up or down on the year, but stressed that the overall lending to businesses under the Project Merlin deal with the government was up 3% — compared with the wider market which was down 5%.

Association of British Insurers attacks bonus levels
Annual bonuses for top executives down 48% on 2010
Profits fall 3% to £5.9bn
Bob Diamond's bonus could be £900,000
Return on equity down to 6.6% for 2011
BarCap revenue and profits down

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