Bring on the £4bn bonuses: Fat cat bankers rack up massive profits despite bringing economy to its knees
03 August 2009
Bankers at Barclays are set to pocket huge bonuses after the firm reported bumper profits of almost £3billion today.
The banking giant's pre-tax profits were up 8 per cent to £2.98billion in the six months to the end of June, buoyed by a fantastic six months for its investment arm.
That division - Barclays Capital - produced an incredible 100 per cent rise in takings to rake in £1.05billion.
Executives in the investment side of the bank are now in line for pay and bonuses worth up to £250,000 for just six months' work.
It is a huge turnaround from last summer when the recession was taking hold of Britain and the banking industry was on the verge of the worst crisis in decades.
Unlike Lloyds Banking Group and Royal Bank of Scotland, Barclays was not part of the £37bn Government bailout. Neither was HSBC which also unveils its profits today.
Barclays turned to Middle East investors for funding and also agreed the £8.2billion sale of its Barclays Global Investors fund management division.
However, its bonus and pay plans will still face criticism after the clamour for an end to the old days of high risk and big rewards in banking.
Bankers in the City are set to pocket a record £4billion in bonuses this year because of surprise profits despite the sector bringing the economy to the brink of meltdown.
It is a major embarrassment to Alistair Darling and City minister Lord Myners who had promised to slam the brakes on corporate excess.
The news will also enrage millions of credit-starved businesses and families after taxpayers were forced to pick up a £37billion bill to bail out the banks.
Barclays chief executive John Varley stressed today that bonuses would be paid at the end of the year and that the bank would consider recent guidance.
'The subject of compensation is a hot topic and I understand that, and it is very important that we are sensitive to the views of citizens and indeed central bankers like Mervyn King on this subject,' he said.
'We will make our decisions about variable compensation at the end of the year... We are sensitised to this issue and we will behave responsibly.'source: dailymail.com