Barclays has reported a big drop in annual profits, having set aside billions of pounds for loans expected to turn sour due to the pandemic.
The bank reported a 30% fall in pre-tax profits to £3.1bn for 2020, down from £4.3bn in 2019.
Despite that the bank announced it would resume dividends, with a payment of 1p per share to shareholders.
‘Resilient and diversified’
Some £492m was set aside to cover expected defaults by borrowers in the final three months of 2020, but that was down nearly a fifth on the previous quarter.
Barclays added that investment banking trading had helped to offset the impact of the Covid crisis on its retail arm, with its “best ever year” for markets and banking income helping to keep the group in profit.
“We expect that our resilient and diversified business model will deliver a meaningful improvement in returns in 2021,” group chief executive Jes Staley said.
“The amount that they’ve been providing against bad loans has been less, quarter by quarter, and that might be a sign that we’re past the worst, but they’re pretty cautious in what they say.”
He added that he felt it was “prudent” for the bank to resume dividends payments to shareholders, after regulators permitted this in December.
In addition to the dividend, Barclays is also set to return cash to investors via a share buyback (where companies listed on the stock market purchase some of their own shares) of up to £700m.