At £5.88 billion Barclays’ 2011 pre tax profits are down 3% on 2011’s £6.07 billion. But although mildly disappointing a loss had not been entirely unexpected.

Shareholders’ return on equity was also down but by a larger 6.6%, something that the bank’s chief executive, Bob Diamond said was ‘unacceptable’, especially as they had been looking at about 13%.

The shares initially dropped about 2.5% on the news, but began to recover as the day progressed and they are now up over 4%.

The bank, which did not take direct taxpayer funding during the 2008 banking crisis, has it seems bowed to the general public mood and trimmed the bonuses down significantly. The bank did though remember get some $47.9 billion from the US Federal Reserve Bank on 18th September 2008.

At the top it said that the annual bonuses for executives and the top eight employees were down by 48%. It has also capped cash bonuses for its investment arm Barclays Capital at £65,000 – the average bonus there was £64,000.

This follows on from 2010 when the bonus pool was reduced by 7%. But the salary bill was increase quite considerably.

For 2011 the overall bonus pool was reduced by 26%, but for BarCap the reduction was much more at 32% down to £1.5 billion.

But the World Development Movement (WDM) says that the bank, which won the recent global ‘Shame Award’ [1] because of its food price speculation, makes up to £340 million on the backs of hungry people.

The WDM also says that the £1.5 billion BarCap bonus pool is big enough to buy 9.6 billion primary school meals for 23 million hungry children in Africa over the next two years.

Christine Haigh, campaigner at the World Development Movement, commented, “Big bonuses encourage bankers to take big risks, not only with financial stability through their debt-based investment, but also with people’s lives. The kind of ‘success’ Barclays has rewarded its executives for contributes to price spikes that put the price of food beyond the reach of the world’s poorest people. Food price inflation is over 5 per cent in the UK at the moment, which is painful enough at a time when people’s real incomes are shrinking. In the poorest countries in the world, food prices have risen by over 50 per cent since 2007, forcing millions of people into hunger and poverty.”


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