Barclays investment bankers celebrate record year

Barclays

The diversified business model has cushioned the shocks of 2020, said bank boss Jes Staley.

(Photo: Reuters)

London Barclays-Investors can look forward to a dividend again. After the bank suspended payments due to the corona crisis last year, it now wants to pay out one pence per share. In addition, the institute is aiming to buy back own shares with a volume of 700 million pounds. The British bank announced on Thursday.

Pre-tax profit fell 30 percent to £ 3.1 billion in 2020. Analysts had expected an even stronger decline. Sales grew one percent to £ 21.8 billion.

As in the previous quarters, the investment bankers also saved earnings in the fourth quarter. For the full year, the division’s pre-tax profit grew 35 percent to £ 4 billion. The bank had a record year in trading stocks, bonds and foreign exchange as well as in M&A business.

In contrast, the credit card and consumer credit business posted a pre-tax loss of £ 388 million. Although the area was profitable again in the second half of the year, it suffered from the high level of loan loss provisions. The branch business in Great Britain also suffered from the corona crisis. The overall return on equity for the group was therefore only 3.2 percent, even though the investment banking division achieved a return on equity of 9.5 percent.

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The diversified business model cushioned the shocks of 2020, said Barclays boss Jes Staley. “Significant profits” are also expected this year.

The big question is how the numbers will develop when the boom for investment bankers slows down again. Because in the British home market the prospects are mixed. The effects of the double shock from Corona and Brexit on the economy are not yet clear, and the low interest rates will depress returns for the foreseeable future.

After all, the bank seems to be well equipped for loan defaults in the wake of the corona crisis. She increased loan loss provisions to £ 4.8 billion in 2020. It also has a lush core capital ratio of 15.1 percent.

More: Credit Suisse ended the fourth quarter with a loss.

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