Barclays the U.K.’s second- largest bank, said this morning that its profit in 2009 more than doubled, lifted by investment banking and the sale of a fund management unit.
Net income rose to £9.39 billion ($14.8 billion) from £4.38 billion a year earlier, the London-based bank said in a statement. This was ahead of expectations.
Barclays’ profit was assisted by the sale of its Barclays Global Investors unit to BlackRock Inc. in December and by the hiring by Barclays Capital of more than 700 people to boost its European and Asian equities and mergers and advisory services.
“We have strengthened our capital position, reduced leverage and added to our liquidity buffer,” said CEO John Varley in the statement. “We are, by consequence, both well prepared for any future economic weakness and also able to continue to execute on our strategy as opportunities arise.”
CEO John Varley and President Bob Diamond said they were not taking annual bonuses. However, the bank, which did not receive taxpayer help during the crisis, said its investment bankers would receive average pay of £191,000 for 2009, including an average bonus of £95,000, amid intense pressure to reduce awards.
With a compensation ratio of 38 per cent for its investment banking arm, down from 44 per cent, Barclays is broadly in line with peers; just above Wall Street giant Goldman Sachs but below European rival Deutsche Bank's 40 per cent.
"The bond of trust between banks and stakeholders has been damaged by the credit crunch and the economic recession. That bond must be restored to health by how banks behave -- how we lend, and how we pay," said Chief Executive John Varley.
The bank also said it would pay £1.5 billion in discretionary cash payments for 2009 and a further £1.2 billion of long-term awards.
Shares in the bank, the first British lender to report earnings, jumped over 7 per cent on the bumper profit figures.
Bloomberg
Additional Reporting: Reuters