August 3, 2009 - 2:29am
Bankers at Barclays’ investment bank are set to repeat its performance in the second half of the year and to see their pay and bonuses more than double to nearly £250,000 this year as their division reports bumper profits today. The return of bankers’ bonuses is expected to provoke outrage so soon after the meltdown in the financial system, which prompted the worst recession since the Second World War.
Barclays, which is among the first of the main high street banks publishing half-year results this week, is expected to report profits of £3.5 billion in the half year to June, boosted by a strong performance of Barclays’ Capital, its investment arm. Meanwhile, analysts expect Barclays Capital to generate income of about £5.35 billion, after write-offs. If it meets that figure, and earmarks 53 % of its income for pay and bonuses, as it did this time last year, it will share out £2.8 billion among its staff.
Last year BarCap employees earned an average of £100,000, as the impact of the financial crisis meant that Barclays Capital had a relatively poor year, generating only £2.8 billion, half the level it is expected to make in the first six months of 2009. Barclays was one of the banks that avoided a government handout last year, turning to Middle Eastern investors to raise £6 billion. However, John Varley, its chief executive, pledged this year that the bonus structure would be overhauled so that executives would have to take a bigger proportion of their payments in shares, and see payouts spread over several years.
Today’s bank results come days after the Treasury Minister called for more clarity on bankers’ pay, demanding that the identity of the top earners in each bank should be revealed. Companies are required to publish pay deals only of those on the board. According to research from the Centre for Economic and Business Research, bonus payments by all banks could hit £4 billion this year, up from £3.3 billion last year.
The increased bonus payments are likely to upset rank and file Barclays staff already disgruntled over the planned closure of the bank’s final salary pension scheme. About 18,000 employees who benefit from the generous retirement scheme, which was closed to new members in 1997, will see their pension savings moved to a defined contribution fund. Barclay’s pension fund has a £2 billion deficit.
Barclays, which is among the first of the main high street banks publishing half-year results this week, is expected to report profits of £3.5 billion in the half year to June, boosted by a strong performance of Barclays’ Capital, its investment arm. Meanwhile, analysts expect Barclays Capital to generate income of about £5.35 billion, after write-offs. If it meets that figure, and earmarks 53 % of its income for pay and bonuses, as it did this time last year, it will share out £2.8 billion among its staff.
Last year BarCap employees earned an average of £100,000, as the impact of the financial crisis meant that Barclays Capital had a relatively poor year, generating only £2.8 billion, half the level it is expected to make in the first six months of 2009. Barclays was one of the banks that avoided a government handout last year, turning to Middle Eastern investors to raise £6 billion. However, John Varley, its chief executive, pledged this year that the bonus structure would be overhauled so that executives would have to take a bigger proportion of their payments in shares, and see payouts spread over several years.
Today’s bank results come days after the Treasury Minister called for more clarity on bankers’ pay, demanding that the identity of the top earners in each bank should be revealed. Companies are required to publish pay deals only of those on the board. According to research from the Centre for Economic and Business Research, bonus payments by all banks could hit £4 billion this year, up from £3.3 billion last year.
The increased bonus payments are likely to upset rank and file Barclays staff already disgruntled over the planned closure of the bank’s final salary pension scheme. About 18,000 employees who benefit from the generous retirement scheme, which was closed to new members in 1997, will see their pension savings moved to a defined contribution fund. Barclay’s pension fund has a £2 billion deficit.