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(Alliance News) - Barclays PLC on Wednesday reported a surge in annual profit, aided by the reversal of credit impairments set aside in 2020 to deal with the fallout from the pandemic, and the bank said it plans GBP1.0 billion in share buybacks.
The FTSE 100-listed stock was 2.8% higher in early trading in London on Wednesday morning at 195.50 pence each.
Recently appointed Chief Executive CS Venkatakrishnan said: "Barclays demonstrated a clear and sustainable path to growth over the course of 2021, delivering double-digit return on tangible equity across our operating businesses, and returning GBP2.51 billion of excess capital.
"Our strategic priorities will continue to develop the diversified business model that we have established, investing in advanced technology capabilities in our consumer businesses, delivering sustainable growth across our global Corporate & Investment Bank, and reinforcing our commitment to aiding the transition to a low-carbon economy."
Venkatakrishnan - whose initials stand for Coimbatore Sundararajan - was thrown into the role last November after former boss Jes Staley's shock resignation. This followed the initial findings of an investigation into Staley's role as private banker to disgraced financier and convicted sex offender Jeffrey Epstein.
As a result, Barclays noted on Wednesday it has frozen millions of pounds in bonus share awards made to Staley.
Barclays' annual report revealed it has suspended all of Staley's unvested long-term bonus share awards pending the regulatory probe. It said almost 70% of these share awards granted since he was appointed in 2015 remain unvested.
Staley stepped down to contest findings by the UK Financial Conduct Authority and Prudential Regulation Authority over the way he represented his relationship with Epstein to the bank.
He still will receive his contractual entitlement to GBP2.4 million in cash and shares – the equivalent of 12 months in fixed pay – as well as a pension allowance and other undisclosed benefits.
Turning to 2021 results, Barclays pretax profit improved sharply to GBP8.41 billion from GBP3.07 billion in 2020, and came in ahead of market consensus of GBP8.11 billion.
Helping to boost profits was a GBP653 million credit impairment release, swung dramatically from a GBP4.84 billion charge in 2020.
Net interest income slipped to GBP8.07 billion from GBP8.12 billion, but net fee, commission & other income rose to GBP13.87 billion from GBP13.64 billion.
Total income rose to GBP21.94 billion from GBP21.77 billion, which was ahead of forecasts of GBP21.90 billion. Net operating income increased to GBP22.59 billion from GBP16.93 billion, ahead of consensus of GBP22.37 billion.
"2021 is the year in which Barclays demonstrated the results of the strategy we set out in 2016," Venkatakrishnan said.
The bank's 2021 common equity tier one ratio - a key measure of a bank's financial strength - was 15.1%, unchanged from 2020.
Barclays declared a total dividend of 6.0 pence, substantially higher than the 1.0p paid out in 2020. The bank also intends to launch a share buyback worth up to GBP1.0 billion, which is expected to commence in the first quarter of this year.
Within units, Barclays UK's annual pretax profit surged to GBP2.47 billion from GBP546 million, with total income rising to GBP6.54 billion from GBP6.35 billion. The performance was driven by Personal Banking, which saw income growing 10%, offsetting an 18% drop from Barclaycard Consumer UK.
The unit's net interest margin weakened to 2.52% from 2.61%.
Barclays International profit jumped 84% to GBP6.66 billion from GBP3.62 billion, but total income slipped 2% to GBP15.67 billion from GBP15.92 billion. The unit was also aided by a GBP288 million credit release compared to a GBP3.28 million charge the year before.
Within Barclays International, the Corporate & Investment Bank saw profit surge to GBP5.85 billion from GBP4.00 billion, but total income slipped 1% to GBP12.33 billion from GBP12.48 billion.
Barclays noted the unit represents the the sixth largest global investment bank, and the largest not domiciled in the US. So, despite, the underwhelming income performance in 2021, it is a "competitive strength" for the bank.
The investment bank saw Global Markets income drop 16% to GBP6.42 billion, with Fixed Income, Currencies & Commodities falling 33% but Equities up 20%. The unit was was saved by Investment Banking fees rising 34% to GBP3.66 billion from GBP2.73 billion.
In the other half of Barclays International, Consumer, Cards & Payments recorded a profit of GBP812 million, swung from a GBP388 million loss in 2020, while income was down 3% to GBP3.33 billion from GBP3.45 billion. The unit's credit impairment charges dropped to GBP185 million from GBP1.72 billion.
"Looking ahead into 2022, we are focussed on delivering consistent performance and returns across our businesses, supported by robust management of our balance sheet, costs and controls. We recognise that the economic environment is more than usually uncertain, with rising inflation rates and tighter monetary policy, while many parts of society continue to recover from the severe social and economic effects of the Covid-19 pandemic," said Venkatakrishnan.
The bank also announced its first female finance director, appointing Anna Cross, currently deputy group finance director, to the role from April 23.
By Paul McGowan; paulmcgowan@alliancenews.com
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