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Tuesday 20th of April 2010
February 9, 2009    

Barclays reports 14% fall in profits

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by Kay Murchie

Barclays Bank has announced a full year pre-tax profit of £6.08 billion for the 2008 year - this represents a fall of 14% compared with the 2007 year. However, the profits still exceeded analysts’ expectations.

The bank has also announced £5.4 billion of write-downs (nearly double a year earlier) and has cancelled its final dividend and said executive directors will not be paid bonuses for the 2008 year.

However, £600 million will still be paid to staff below board level, however, this figure is almost 50% less than was awarded in the previous year.

The announcement comes despite a review into bonus culture, announced by Chancellor Alistair Darling over the weekend.

It has been revealed that RBS and Lloyds Banking Group (both partly-owned by the Government) are set to award bonuses to its staff.

Meanwhile, Barclays’ chairman Marcus Agius and chief executive John Varley wrote to investors last month to reassure them it was on target to announce profits of over £5.3 billion for 2008.

Shares in Barclays have plummeted almost 80% in the last year alone as investors feared for its financial health.

To add to its woes, last week Moody’s downgraded the bank’s long-term debt rating from Aa1 to Aa3, while its financial strength rating was cut from B to C.

In October, Barclays rejected the Government’s bailout package and announced that it was raising £5.3 billion from investors in Qatar and Abu Dhabi, who took a combined stake in the bank of over 30%.

Barclays’ Tier 1 equity ratio was at 6.7% at the end of 2008 - up from 5.1% a year earlier.

Shares in the bank gained 10% in early trading today to 115.1p.

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