Barclays sets aside £5bn to pay for Covid loans, but CEO insists the worst is over

BARCLAYS profits crashed 30% and it set aside towards £5 billion to deal with bad loans made during the pandemic, but chief executive Jes Staley was relatively upbeat insisting that the worst is behind us.

The bank’s Canary Wharf office should be mostly full come the summer, as vaccinated staff return, he predicted.

“We were surprised a year ago at how well the bank could function with 55,000 people working from home” he said. “When it first happened it was sort of cool to be sitting at the kitchen table. That is getting old. There is a value in proximity, in working collectively,” he told the Standard.

Barclays will pay a dividend of 1p a share, after watchdogs relaxed rules on payouts to shareholders. It will also do a share buyback of £700 million, a sign of confidence in the strength of its balance sheet.

The bank’s annual report reveals that Staley was paid £4 million in the last year, down from nearly £6 million a year ago.

Finance director Tushar Morzaria got £2.8 million, down from £3.9 million.

Barclays profits slumped from £4.3 billion to £3.1 billion. It set aside £4.8 billion to cover loans it fears will not be recovered due to Covid.

Barclays investment bank, which some wanted it to scrap, again did well. By some measures, the investment bank had its best year ever.

Staley said: “For five years we have carried the water on why do we even have an investment bank. That diversification was something we wanted to hang on to.”

Barclays shares have rallied this year. Today they were steady at 153p.

Staff will share a bonus pot of £1.6 billion with the lions share likely to go to the traders and dealmakers that fuelled the success of the investment bank.

RBC’s Benjamin Toms said: “Barclays’ diversity has proven to be an asset through Covid-19 with the strong investment bank covering for the weaker UK.”

Branch numbers fell from 963 to 859.

The bank has provided 680,000 payment holidays for mortgage, credit card and loan customers.

“UK consumers are extremely cautious, which is understandable,” said Staley.