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Barclays profits plunge 32% but bonuses jump 10% in 2013

Barclays bankers’ bonuses jumped 10 per cent despite pre-tax profits plunging by 32 per cent last year. 

Its annual results, published today, show profits before tax fell to £5.2bn last year, compared to £7.6bn in 2012. Barclays blames the drop on the cost of its restructuring programme and a 4 per cent fall in income.

The bank’s profits significantly decreased in the fourth quarter when it made just £191m, an 86 per cent fall on pre–tax profits of £1.2bn in Q3.

It blames the drop in Q4 on £331m of charges for litigation and regulatory penalties in its investment bank, the UK bank levy of £504m and £468m of restructuring costs. 

Barclays also made a further £1.35bn provision for payment protection misselling after setting aside £1.6bn in 2012.

It also set aside £650m for interest rate swap misselling on top of £850m in 2012.

Despite the huge increases in conduct provisions and fall in profits, bonuses increased from £2.2bn in 2012 to £2.4bn in 2013.

Barclays points out that bonuses are still £1.1bn lower than 2010, which it says demonstrates the “impact of the repositioning work” over the last three years.

The average bonus payout increased 9 per cent from £15,600 per employee to £17,000. The investment bank bonuses grew 10 per cent per employee from £53,500 to £60,100. Bonuses to senior staff were 100 per cent deferred.

Barclays chief executive Antony Jenkins has waived a bonus of up to £2.75m because of regulatory costs and a £6bn fundraising but will awarded £4m in shares next month.

In June, the bank launched a £5.8bn rights issue agreed with the Prudential Regulation Authority to partially plug a £12.8bn capital hole.

Jenkins says: “2013 has been a year of considerable change for Barclays. I am pleased with the progress we made in starting to rebuild trust, defining and implementing a common culture, repositioning the business for the future, and strengthening our balance sheet.”

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