Barclays profits fall to £6bn

Chief executive John Varley said the bank's executive directors would receive no bonuses this year, while payouts across the bank would be "significantly lower" than 2007.

Barclays posted better than expected profits of £6.1 billion for 2008 as the row over payouts by banks propped up by the taxpayer continued to rage.

Although Barclays has not used the Government's recapitalisation scheme - raising funds from the Middle East instead - it is likely to take part in other forms of public support to the struggling sector.

Chancellor Alistair Darling has launched a review of the banking industry which will also look at payment practices. And the Financial Services Authority added that there was "widespread concern" that the bonus culture culminated in the current crisis.

Barclays said it was reviewing its compensation arrangements to ensure they "evolve appropriately".

"Our endeavour is to maximise the alignment between these and the interests of our owners, as well as to ensure that our compensation policies and practices are appropriately benchmarked to changing best practice in the industry," Mr Varley said.

Mr Varley said Barclays' overall payouts on salaries and bonuses had actually fallen 10% to £6.27 billion last year despite the number of staff rising 20,000 to 155,000.

He would not be drawn on total bonus payouts paid by the bank, but said "performance-related" costs were down 48% overall - driven by investment banking division Barclays Capital, where profits fell 44% last year.

Mr Varley added there had been instances across the industry "where pay has not been reflective of risk-taking". His comments came alongside dire predictions for the UK from the bank, which forecasts output will shrink by at least 2% this year as the UK grapples with the "familiar but nonetheless pretty brutal" problems of recession.