Barclays staff to share £1.2bn in bonuses despite drop in profits

Barclays staff will share £1.2bn in bonuses despite a 15% drop in the bank’s annual profits, having been hit by the costs of a US trading blunder and more money being put aside for a potential jump in defaults by borrowers.

The bank revealed in its annual report on Wednesday that its staff bonus pool would go relatively untouched, with its top performers to share £1.2bn between themselves for their work in 2022. That is down only 3% compared with last year. Including deferred bonuses, the pool was down 8% at £1.8bn.

It follows a near 15% drop in pre-tax profits to £7bn for the whole of 2022. That is compared with £8.2bn a year earlier, and is lower than analyst expectations of £7.2bn.

Barclays’ profits were hit, in part, by the £1.2bn it put aside for a potential increase in defaults by customers, who are considered more at risk of falling behind on payments given the current economic outlook. Last year, Barclays released £653m from its cash cushion as conditions appeared to improve after Covid restrictions lifted.

It was also knocked by £1.6bn in legal and misconduct charges. That figure includes the costs of rectifying a trading blunder that led to the sale of US securities that Barclays had not been authorised to sell. Barclays not only had to pay a US fine for the error but also had to buy back the securities it wrongly sold.

Its chief executive, CS Venkatakrishnan, said the bank “performed strongly in 2022” but added that it was aware of potential challenges. “We are cautious about global economic conditions but continue to see growth opportunities across our businesses through 2023.”