BarCap set for bigger revenue share

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Chief executive Bob Diamond will say that bonuses will be subject to 'claw-back' in future

Banking giant Barclays is this week expected to announce that it has handed an even bigger share of revenues to its investment bankers.

While individual bonuses at Barclays Capital may have been cut by as much as 10%, newspaper reports said the overall compensation pool covering pay and incentives will have risen to about 40% of BarCap revenues.

The Sunday Times said Barclays will say that it has reduced bonuses for British bankers in line with last week’s Project Merlin agreement, although overall pay has stayed high because salaries are not controlled by the deal.

It is also thought that measures used to account for deferred bonuses from 2009 and BarCap’s push into new areas of business will have inflated compensation.

Barclays will provide details of its pay and bonus figure alongside the bank’s full-year results, when pre-tax profits of £5.8 billion are expected.

Chief executive Bob Diamond will say that bonuses will be subject to “claw-back” in future if the bank’s capital reserves fall below a specified level.

He is said to be in line for a bonus of more than £9 million but details of Mr Diamond’s pay packet may not be disclosed until the company’s annual report is published next month.

Mr Diamond, who took over as chief executive in January, will use his first set of results as boss to update investors on a strategic review, with the bank expected to exit some of its international retail operations.

BarCap, the division formerly headed by Mr Diamond, is estimated to contribute towards 60% of the bank’s profits. But, as reflected in US banking results earlier this year, the sector suffered from weak activity in the final three months of last year.

Nomura analysts have forecast BarCap’s pre-tax profits will be around £4.3 billion, broadly flat on the previous year, compared with £805 million in UK retail banking, up on the £752 million in 2009.

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