Released provisions strengthen the result.
(Photo: dpa)
London The new Barclays boss could be satisfied. The bank is on a clear and sustainable growth path, said CS Venkatakrishnan when presenting its first annual figures on Wednesday. At least in terms of business, his predecessor Jes Staley left an orderly house.
The British financial house increased its pre-tax profit last year by 175 percent to 8.4 billion pounds. The investment banking division contributed £5.8 billion. This is the highest profit in the history of the division, said the Barclays boss. The group’s turnover grew by one percent to £21.9 billion. The stock climbed 2.6 percent on Wednesday.
A major reason for the jump in profits was that the bank was able to further reduce its risk provisions for possible loan defaults. In the first year of Corona, Barclays had set aside £4.8 billion, now they were able to release £700 million net. Profits in the fourth quarter exceeded analysts’ expectations by a quarter. Joe Dickinson of the US investment bank Jefferies spoke of a “solid quarter”.
Shareholders can look forward to a higher-than-expected payout, with a total of £2.5 billion being distributed in the form of dividends and share buybacks. The bonus pool for employees has also increased significantly by 23 percent. However, the increase is significantly smaller than for the US banks, with which Barclays is in direct competition.
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You can’t compare that, said CFO Tushar Morzaria. Due to the statutory bonus limit, European banks paid fewer bonuses. Because of this, the salaries are higher.
Barclays freezes ex-CEO Jes Staley’s stock options
CEO Venkatakrishnan, known internally as “Venkat”, was surprisingly appointed to the post in November after his predecessor Staley resigned from the post because of the Epstein affair. The Staley saga also cast a shadow over the annual figures: On Wednesday, the bank announced that it would freeze the former CEO’s stock options until the allegations against him are resolved.
Staley had a close client relationship with the late sex offender Jeffrey Epstein for many years at his previous job at US bank JP Morgan. The British supervisor accuses him of not correctly portraying this relationship to Barclays and the supervisors. Staley denies the allegations and wants to focus on clearing them up.
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Following Staley’s departure, Chief Financial Officer Tushar Morzaria is stepping down as of April. His previous deputy, Anna Cross, will move up. Morzaria remains connected to the bank as an investment banking advisor.
In any case, the corporate strategy of Staley and Morzaria should not be shaken. Venkat, who, like Staley, came from JP Morgan, continues to pursue the goal of a universal bank with a strong investment banking division.
The turnover of investment bankers fell by one percent last year – mainly because trading in foreign exchange and bonds collapsed after the good corona year 2020. On the other hand, stock trading and the consulting business boomed. Overall, the division achieved a high return on equity of 14.9 percent.
Barclays is number six in the world for investment banking, Venkat said. He will do everything to improve this position. However, he reminded that business on the markets is very cyclical.
Venkat wants to accelerate digitization in the private customer business. The number of products will be reduced by a third over the next four years, he said. You need “more efficiency”. He wants to strengthen the credit card business through partnerships with retailers. He cited the new shopping card from the US fashion chain Gap as an example.
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