This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.theguardian.com/business/2017/feb/23/barclays-profits-bank-uk-us-brexit
The article has changed 3 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Barclays' profits almost triple – but chairman admits it still faces challenges | Barclays' profits almost triple – but chairman admits it still faces challenges |
| (35 minutes later) | |
| Barclays is still facing hefty fines and penalties, its chairman admitted on Thursday as the bank reported its profits in 2016 had almost tripled. | |
| John McFarlane said the bank still faces challenges despite the improved performance, driven by dramatic fall in the amount set aside to cover ligation matters. | John McFarlane said the bank still faces challenges despite the improved performance, driven by dramatic fall in the amount set aside to cover ligation matters. |
| The bank – which has been scrambling to repair its reputation since the 2012 Libor rate-fixing scandal – is fighting the US Department of Justice over a decade-old mortgage bond mis-selling scandal and awaiting the outcome of an investigation by the UK’s Serious Fraud Office into the way it raised funds during the height of the banking crisis. | The bank – which has been scrambling to repair its reputation since the 2012 Libor rate-fixing scandal – is fighting the US Department of Justice over a decade-old mortgage bond mis-selling scandal and awaiting the outcome of an investigation by the UK’s Serious Fraud Office into the way it raised funds during the height of the banking crisis. |
| McFarlane did not spell out the investigations he was referring to when he said: “A number of potentially material legacy conduct matters need to be resolved at acceptable cost.” | McFarlane did not spell out the investigations he was referring to when he said: “A number of potentially material legacy conduct matters need to be resolved at acceptable cost.” |
| He also cited the need to “mitigate the risk of the UK’s exit from the EU” and complete the sale of the bank’s African’s business as among the matters hanging over the bank. | He also cited the need to “mitigate the risk of the UK’s exit from the EU” and complete the sale of the bank’s African’s business as among the matters hanging over the bank. |
| “I genuinely believe we can see the light at the end of the tunnel,” said McFarlane. | “I genuinely believe we can see the light at the end of the tunnel,” said McFarlane. |
| A year ago, McFarlane had complained about the fines and taxes imposed on the bank and it cut it dividends to pay for a scaling-back in Africa to focus on the UK and US under new chief executive Jes Staley. | A year ago, McFarlane had complained about the fines and taxes imposed on the bank and it cut it dividends to pay for a scaling-back in Africa to focus on the UK and US under new chief executive Jes Staley. |
| Alongside this year’s annual results, McFarlane raised the prospect of the dividend payout – set at 3p for 2016 and 2017 – being reconsidered once the bank’s fortunes had improved. | Alongside this year’s annual results, McFarlane raised the prospect of the dividend payout – set at 3p for 2016 and 2017 – being reconsidered once the bank’s fortunes had improved. |
| Staley, who axed 15,000 jobs in 2016 in part through a hiring freeze, said it was too early to discuss any changes to the dividend that might take place once the restructuring was completed later this year. | Staley, who axed 15,000 jobs in 2016 in part through a hiring freeze, said it was too early to discuss any changes to the dividend that might take place once the restructuring was completed later this year. |
| The annual report showed that Staley – an American recruited in 2015 – received £4.2m in 2016, his first full year in charge. The bank also disclosed that 364 of its staff were paid more than £1m last year, including 11 who received more than £5m. | The annual report showed that Staley – an American recruited in 2015 – received £4.2m in 2016, his first full year in charge. The bank also disclosed that 364 of its staff were paid more than £1m last year, including 11 who received more than £5m. |
| The bank, often under fire for its huge payouts to staff, has changed the way it accounts for its bonuses. Staley insisted that bonuses were down by 1% to £1.5bn in a year when profits were up. | The bank, often under fire for its huge payouts to staff, has changed the way it accounts for its bonuses. Staley insisted that bonuses were down by 1% to £1.5bn in a year when profits were up. |
| Bonuses are spread over three years and Barclays bankers – who got their first payout the year after the bonus was awarded – will now get the first payment a year earlier. | |
| Changes are also being proposed to the way Staley and finance director Tushar Morzaria are paid. They will no longer receive a “salary” but instead receive “fixed pay” which incorporates their salary and the role-based allowances that were introduced by major banks following the EU pay restrictions which capped bonuses. | |
| Barclays intends to give Staley £2.3m of fixed pay for the next three years, half in shares and half in cash. His current pay arrangement involves a £1.2m salary and £1.15m in share-based fixed pay allowances. Morzaria is to get £1.6m in fixed pay, compared with a £800,000 salary and £750,000 in role-based allowances. | |
| Pre-tax profits rose from £1.1bn to £3.2bn, fuelled by a fall in provisions for legal matters from £4.3bn to £1.3bn. Impairment charges for bad debts rose 35% to £2.3bn. | Pre-tax profits rose from £1.1bn to £3.2bn, fuelled by a fall in provisions for legal matters from £4.3bn to £1.3bn. Impairment charges for bad debts rose 35% to £2.3bn. |
| Staley focused on the attributable profit – the bottom line for shareholders – of £1.6bn, an improvement on a loss from a year ago. | Staley focused on the attributable profit – the bottom line for shareholders – of £1.6bn, an improvement on a loss from a year ago. |
| The bank is looking at the ways it will need to change its operations – which include a large investment bank – as a result of Brexit. Staley said the bank had operations in Germany and Dublin but no decisions had been made about how it would respond. | The bank is looking at the ways it will need to change its operations – which include a large investment bank – as a result of Brexit. Staley said the bank had operations in Germany and Dublin but no decisions had been made about how it would respond. |
| “We believe London is the financial centre for Europe today and we believe in the end state it will continue to be,” said Staley, who played down the impact on jobs in London. | “We believe London is the financial centre for Europe today and we believe in the end state it will continue to be,” said Staley, who played down the impact on jobs in London. |
| The bank’s shares rose by 3% to 242p in early trading. This is below the 260p at which the shares were trading in 2015 when McFarlane promised to double the share price in three years. | The bank’s shares rose by 3% to 242p in early trading. This is below the 260p at which the shares were trading in 2015 when McFarlane promised to double the share price in three years. |
| Sandy Chen, an analyst at Cenkos, said: “The key proof that the restructuring is working is the improvement in capital ratios.” | Sandy Chen, an analyst at Cenkos, said: “The key proof that the restructuring is working is the improvement in capital ratios.” |