Barclays handed out £1.5 billion in bonuses to investment bankers for last year - although the lender slashed the pot by 32 per cent amid mounting pressure over the controversial payouts.
Providing more disclosure on bonuses in its annual results than ever before, the bank said the average bonus for staff at investment arm Barclays Capital was cut by 30 per cent to £64,000 in 2011 while the the group total bonus pool was down 25 per cent at £2.2 billion.
However, chief executive Bob Diamond refused to be drawn on questions about his own bonus, amid reports he could be in line to receive more than £10 million in payouts.
Addressing the wider issue of bonuses, the American banker said: “We need to balance remaining competitive with being responsive to the public mood.”
But the bank’s moves to cap and slash bonuses were not enough to appease unions and anti-poverty campaigners as “serious questions exist about the moral backbone of those running the financial service sector”.
The results come after weeks of conflict over bankers’ bonuses, in which Royal Bank of Scotland chief Stephen Hester turned down his £963,000 bonus amid mounting pressure and Lloyds boss Antonio Horta-Osorio waived his payout following a leave of absence.
Elsewhere, Barclays, which reported pre-tax profits of £5.9 billion for 2011, down 3 per cent on the previous year, said it introduced a cap on the cash part of bonuses for investment bankers at £65,000.
The results said annual incentives for executive directors and the eight highest paid senior executive officers were down 48 per cent compared to 2010 on a like-for-like basis, though Mr Diamond would not confirm how his own pay fitted into this decline.
Those hoping for a peek at Mr Diamond’s pay packet will have to wait until the annual report is published in mid-March.
Mr Diamond said the mood surrounding the industry was not positive but the private sector would only deliver much-needed growth to the wider economy with a “confident” banking sector.
David Fleming, Unite national officer, said: “The announcement on bonuses today by Barclays is yet another illustration of the banking sector continuing to ignore the public outrage and disgust at their behaviour.
David Hillman, spokesman for the Robin Hood Tax campaign, said: “Bob Diamond can only be hiding his bonus because he fears it will look unreasonable to most ordinary people. His potential pay package alone would keep hundreds of nurses and teachers in jobs.”
Mr Diamond hailed Barclay’s business lending record in 2011 as it beat the Project Merlin targets drawn up between Britain’s top five banks and the Government.
Barclays delivered £43.6 billion of gross new lending to UK businesses, including £14.7 billion to small and medium-sized enterprises, exceeding its Merlin target by 13 per cent.
“We really got on our horses to get businesses going,” Mr Diamond said.
The improved lending figures came as the business revealed income growth in every division but investment arm BarCap.
The UK retail and business banking division, where customers increased by 3 per cent to 760,000, saw pre-tax profits increase 60 per cent to £1.4 billion, after stripping out the division’s £400 million charge for mis-selling payment protection insurance (PPI).
The division saw the number of current accounts increase by 2 per cent to 11.9 million, savings accounts were up 5 per cent to 15.1 million, while mortgages increased 2 per cent to 930,000.
Credit card business Barclaycard saw net operating income increase 21 per cent to £2.8 billion, while pre-tax profits were up 53 per cent to £1.2 billion, excluding the division’s £600 million PPI hit.
Meanwhile, the bank slashed its bad debts by 33 per cent to £3.8 billion and cut its debt exposure to struggling eurozone countries Portugal, Italy, Ireland, Greece and Spain reduced by 14 per cent to £7.1 billion.
Barclays shares were 3.5 per cent higher after the results were published, but did dip into the red earlier in the session as analysts questioned some of the figures.
BarCap saw pre-tax profits drop 32 per cent to £2.96 billion in 2011 as market turmoil, sparked by recession and debt contagion fears in the eurozone, increased throughout the year.
The quarter-by-quarter breakdown at the division shows profits falling from £1.3 billion in the first three months of the year to £267 million in the fourth quarter.
Meanwhile, Barclays said it would hit its target to generate a return on equity of 13 per cent later than 2013, after reporting 6.6 per cent return last year.
Ian Gordon, analyst at Investec, said: “Bob Diamond’s track record is unrivalled but today is not his finest hour.”
He added: “It is BarCap’s dominance of the group and the weak external environment that render the resilient performance across retail and business banking almost irrelevant.”
