Barclays ready to cut 12,000 jobs - but pays out £2.4bn in bonuses

 

Barclays was today accused of sticking “two fingers up” at customers and staff after admitting it awarded almost £2.4 billion in bonuses last year while preparing to axe thousands of jobs.

The total bonus pool at Britain’s third biggest bank was 10 per cent up on 2012, despite tumbling profits and a further costly fallout from misselling scandals.

The high-street lender also confirmed it will cut 10,000 to 12,000 posts this year, including about 7,000 losses in the UK and more than 800 senior managers.

Chief executive Antony Jenkins, who waived a bonus of up to £2.75 million, said the awards were necessary “to make sure we have the best people in the firm”.

But the explanation was angrily dismissed by critics of the City bonus culture, which has enjoyed a revival this year ahead of new European caps on payouts.

Liberal Democrat President Tim Farron said: “On a day that Barclays announced that its bonus pot is growing, it also said its profits are down by a third and that it’s planning to axe thousands of staff.

“The banking sector must remember it is there to serve the economy, not the other way round. This announcement shows a staggering lack of social responsibility and basic wisdom.”

TUC General Secretary Frances O’ Grady said: “Today Barclays has stuck two fingers up to hard-pressed families across Britain by announcing another multi-billion-pound bonus pool. But rather than tackle the damaging City bonus culture, the Chancellor has been to Brussels to defend their greed.”

Labour MP George Mudie, who sits on the Commons Treasury committee, added: “Bloated investment bankers are being put before customers and shareholders. It’s a disgrace that so many non-achievers continue getting these bonuses while profits are going down.”

Labour argued that the payments highlighted the case for its tax on bank bonuses.

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David Hillman, spokesman for campaign group Robin Hood Tax, which is demanding a new levy on all financial services firms, said: “It’s a reflection of the Government’s misplaced priorities that they allow such excess to continue in the City while gutting our public services.”

Barclays, which did not receive direct support from taxpayers during the 2008 financial crisis, said bonus awards rose £210 million, or 10 per cent, to £2.378 billion.

Bonuses at the investment banking division, based in Canary Wharf, increased 13 per cent to £1.579 billion, or an average of £60,100 per head.

Mr Jenkins, who had pledged to restore the reputation of Barclays after the damage wreaked by the Libor rigging scandal under Bob Diamond’s aggressive leadership, said: “We have to make a judgment on what is best for our shareholders.

“We employ people from San Francisco to Singapore and if we are going to be competitive we have to pay competitively. Parts of the investment bank, notably equities, had a very good year while others, like fixed income, did not.” The group’s underlying pre-tax profits fell to £5.2 billion. Mr Jenkins told BBC Radio 4’s Today programme that Barclays had made “substantial progress” in transforming itself into a “go-to” bank which was attractive and open to customers, but further work was needed.

“We do have a long way to go and I acknowledge that,” he added.

But Business Secretary Vince Cable said: “The image of banking has been badly tarnished by a series of scandals and rebuilding public trust is going to require a huge effort.

“We need a responsible banking sector which rejects the bonus-fuelled culture of the past and puts the needs of consumers and businesses back at the heart of what they do.”

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