Barclays bankers set for bonus bonanza as City dealmaking sends profits to document highs
Barclays bankers are set for bumper bonuses as a surge in takeover exercise sparks a charges bonanza within the City.
The financial institution posted profits of £6.9billion for the primary 9 months of the year – a document excessive and up 187.5 per cent on the identical interval in 2020. Third quarter profits alone hit £2billion, 20 per cent forward of expectations.
The efficiency was pushed by the funding financial institution, vindicating the technique pursued by chief government Jes Staley who fought off efforts by activist investor Ed Bramson to cut back the division.
Vindicated: Barclays chief exec Jes Staley (pictured) fought off efforts by activist investor Ed Bramson to cut back the funding division
Investment banking charges got here in at £971million within the third quarter, up from £610million in the identical interval final year and similar to the large positive factors posted by Wall Street rivals final week.
The funding financial institution, headed by Paul Compton, has been concentrating on tech floats as an space of development.
Barclays was the lead advisor on bringing money switch business Wise to the London stock trade in July.
The itemizing was hailed as a triumph for the City as it seeks to draw extra monetary know-how companies.
The financial institution additionally suggested on the IPO of DNA sequencing agency Oxford Nanopore final month, whereas Britishvolt, which makes batteries for electrical automobiles, remains to be within the financial institution’s pipeline.
Other offers labored on embody advising John Laing on its sale to personal fairness big KKR and the merger of BHP’s oil business with Woodside Petroleum.
Danni Hewson, analyst at dealer AJ Bell, stated: ‘Unlike peers like Lloyds and Natwest, which retrenched in the wake of the financial crisis to become fairly straightforward lenders, Barclays still has a major investment banking arm.
‘This allowed it to follow in the footsteps of US peers which earlier this month reported a major boost from the recent frenzy of dealmaking in financial markets and the wider corporate world.’
The efficiency means Barclays bankers are heading in the right direction for bumper bonuses within the New Year.
High flyers are set to scoop thousands and thousands of kilos whereas others will decide up a whole lot of 1000’s. In 2020 the bonus pool rose by 6 per cent to £1.6billion regardless of a 30 per cent drop in profits throughout the Covid disaster.
Staley informed Bloomberg: ‘The bonus pool is tied to the corporate and investment bank, you will see compensation higher this year given that they have generated record profits.’
Staley was additionally buoyant in regards to the prospects for the UK economic system, brushing apart fears over inflation, provide bottlenecks and the power disaster.
The financial institution raised its development forecast for UK GDP this year to 7 per cent from its prediction of 6.5 per cent in April when the economic system was simply rising from lockdown.
Staley stated: ‘A degree of inflation will be welcomed so long as it is driven by economic growth, that could be a positive.
‘The supply chain disruptions are there. It’s not holding again an economic system that’s going to develop at 7 per cent. Its long-term affect will likely be fairly modest.’
Staley additionally moved to quell studies that he might go away by the tip of this year amid an ongoing investigation by the Financial Conduct Authority over his ties to intercourse offender Jeffrey Epstein. It is Staley’s second run-in with the regulator since becoming a member of the financial institution in 2015.
It is known the financial institution is on the hunt for a substitute however yesterday Staley informed the Evening Standard he could be staying for one other two years.
He stated: ‘We are taking the Jamie Dimon [boss of JP Morgan] approach. Every year Jamie says, “another five years”. I say “another two years”.’
Wall Street banks such as Goldman Sachs and JP Morgan final week reported booming profits from deal making.
Barclays insists it’s holding its personal and grabbing market share.
‘We now have a position as one of the top six global investment banks and we’re going to maintain that,’ stated Staley, referring to Barclays vaulting Credit Suisse in trade rankings.
Its Swiss rival is reeling after a succession of scandals brought about billions in losses.
Barclays shares have doubled within the final year however yesterday, nevertheless, the stock fell 0.8 per cent, or 1.54p, to 196.9p.