Barclays posts 10% annual profits rise despite investment division suffering earnings dive

Banking giant Barclays has posted a 10 per cent rise in annual profits, but the haul was lower than expected as its investment bank saw earnings dive 22 per cent.

Boss Jes Staley said it had been a year of “considerable strategic progress” as he reported pre-tax profits of £3.54bn for 2017, up from £3.23bn in 2016.

But “weak market conditions” for its corporate and investment bank saw profits in the division tumble to £2.1bn last year from £2.7bn in 2016.

Barclays said it set aside £1.2bn for litigation and conduct, including £700m for payment protection insurance (PPI), but that there were no new charges for the mis-selling scandal.

It posted an attributed loss of £1.9bn for the year against a profit of £1.6bn in 2016 after it previously announced losses of £2.5bn from the sale of Barclays Africa Group.

The loss also follows a £901m hit from President Donald Trump’s 1 January corporate tax changes in the US.

The results come after Mr Staley recently completed a group-wide restructure, having overseen a mammoth programme to offload non-core businesses in a bid to focus on core UK and US operations.

Barclays has shed 60,000 jobs as part of the shake-up, while also selling off businesses, such as the Africa arm.

Mr Staley said the group was already starting to “see some of the benefits of our work” in 2017.

He said: “We have a portfolio of profitable businesses, producing significant earnings, and have plans and investments in place to grow those earnings over time.”

He added: “Although we are only seven weeks into the first quarter, and it is too early to offer formal guidance, we are pleased with the start to the year, and in particular in the markets businesses in CIB (corporate investment banking).”

Shares in Barclays rose 4 per cent as the bank announced a 3p-a-share dividend and announced it would more than double the payout next year, with aims to pay 6.5p a share.

Barclays’ annual report published alongside the results showed that Mr Staley’s total pay package fell to £3.9m in 2017 from £4.2m in 2016, although he was also awarded bonus shares worth £2.9m under a three-year long-term incentive scheme.

He landed an annual bonus of £1.1m, down from £1.3m for 2016, while his annual salary remained at £2.4m, but the bank said it was keeping his bonus payments “under review” while he is under investigation over an attempt to identify a whistleblower.

The Financial Conduct Authority and the Prudential Regulation Authority are investigating the American’s conduct relating to the incident in 2016.

The bank’s annual report also showed that 369 employees earned more than £1m last year, while 11 took home pay deals worth more than £5m.

Of these, 32 per cent are based in the UK, 61 per cent in the US and 7 per cent elsewhere internationally.

Staff shared out a £1.51bn total bonus pool for 2017, down from £1.53bn in 2016.

PA