Shareholders in Barclays (BARC) will not receive a pay rise through higher dividends despite the bank's staff sharing £2.3 billion in bonuses, two thirds collected by investment bankers. The shares fall 1.3% to 271.4p following publication of its full-year results.
Barclays has decided to hold the full-year dividend at 6.5p, saying a large sum of cash must be retained to help meet regulatory guidance on capital requirements as a business.
This decision has been made despite Barclays reporting an improved safety margin during the year to create a 13.2% core tier 1 ratio, up from 10.8% in 2012. This is a measure of the bank's financial strength from a regulator's point of view.
The pressure is building for chief executive officer Antony Jenkins, who waived his bonus for the second successive year, particularly on the back of reports that data from some 2,000 customers have been stolen and sold.
The bank’s pre-tax profits fell 32% during 2013 to £5.1 billion, which it blamed on its restructuring, legal costs and pulling out of several operations.
But there is some positive news. Barclays has brought its lending closer to the amount taken on deposit with its loan-to-deposit ratio falling to 101% from 110% a year ago.
The top performers in the group are its UK retail business and credit card arm, Barclaycard. Pre-tax profits in the latter operation improved by a fifth to £331 million, while its high street business added £375 million to the group’s pre-tax profits, up by 11%. At the foot of the performance table was its European retail business and its wealth management division, which saw its taxable profits slide by 92% in 12 months.
Despite the group's pre-tax profits falling Investec analyst Ian Gordon is a fan. He says: ‘The broad absence of negative one-offs is in stark contrast to loss-making UK domestic peers, and fresh asset reduction targets offer further comfort on leverage.’
But just like many of its peers Barclays continues to pay for its past sins, adding £1.3 billion to its pot to compensate those it mis-sold payment protection insurance.
The bank intends to sustain cost cutting measures which could see up to 12,000 jobs in the firing line.