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Barclays today announced its return to dividend payments.
Only a year after the bank was forced to stop them at the height of the credit crunch which almost destroyed the UK banking system, it said it will pay a first interim dividend of just one penny.
Finance director Chris Lucas said that this should not be taken as any kind of indication of how much it will pay out for the full year.
But it will be nothing like the 34p a share paid in 2007 or even the 11.5p shareholders received in the first half of last year until Barclays put a stop to its payouts.
Lucas defended the bank's right to reward its shareholders for helping it to avoid having to rely on government bailouts.
“We believe that it is a good thing that we are returning to paying dividends,” he said. “We acknowledge that there has been a lot of support to the banking system by taxpayers but we also have to recognise that our shareholders have supported us several times in the last year when we raised capital. They deserve a return for that and this is the return to paying dividend which we promised them.” Unlike its rivals Royal Bank of Scotland and Lloyds, Barclays remains profitable. Its pre-tax profit fell by 19% to £4.5 billion in the first nine months of the year but underlying profits more than doubled.
Lucas pointed out that top line total income which rose 26% in nine months to £23.8 billion exceeded what the bank earned for the whole year in 2008.
The major driver to both income and profit growth was investment banking where BarCap made nine-month profits of £2.7 billion reflecting the takeover of the US business of Lehman Brothers this time last year.
High Street and business banking profits fell by more than £900 million to £2.2 billion as bad debts across the group soared by 65% in the first nine months.
Lucas said that bad debts actually improved slightly in the third quarter with an average rate of 1.36% in the latest three months against 1.44% in the first half.
But he does not expect this to be the peak with bad debts likely to rise again in the final quarter.
Nevertheless he told analysts that the impairment charge for the full year would now be nearer £9 billion that £9.6 billion.
Barclays submitted its outline plans for bonuses to City regulators last week.
Lucas said: “That's the very early stages. We won't actually be looking at the quantum of bonuses until January when we know what profits for the full year are.
“We will comply fully with the recent G20 rules and we will talk to all our stakeholders when it comes to judging how much we will pay.”
Reader views (2)
It can't be very hard to coin it when you are paying a shade over zero for your money and lending it out at the present rates. No none knows what the FSA stress tests included and with so much off balance sheet all we can expect to see from our banks is smoke and mirrors and above all else an adept ability to contiue to pull the wool over this economically illiterate government's head.
Can our banks stand on their own 2 feet? The answer is resounding No!! Why? Because they have so much off balance sheet garbage loans which they can't possibly afford to write off or even hope to convert into equity, yet the FSA say they are solvent.
Well knock us all down with a feather duster, these numbers look good but any moron could produce them given the benefits the banks have had courtesy of the UK Taxpayer.
Nothing goes down in a straight line and we have more than had the compensatory bounce now we will hover until February/March when the real mess will hit the fan.
Crash Brown knows is as dos his Lord Meddlesome,let alone the Bank of England
For a bank to enjoy any plaudits given what they have sought to hide would be a poor call. Unfortunately the worst is still yet to come.
- Robert Marshall, LONDON
Yet still the bank charges go up and up, GREED from them and MPs will see us off
- Richard Edmunds, Rayleigh UK
