Barclays resumes dividend payouts as annual profit halves

Barclays resumes dividend payouts as annual profit halves

LONDON: Barclays‘ 2020 annual profit fell by half, the bank reported on Thursday, much less than forecast as a strong performance by its investment bank offset provisions against bad loans from the economic fallout of the COVID-19 pandemic.

The British bank said it would resume paying dividends of 1 pence per share, as well as returning capital via a 700 million pound ($969.36 million) buyback, after lenders halted payouts last year at the request of the Bank of England.

Barclays reported a profit before tax for 2020 of 3.1 billion pounds ($4.29 billion), well above the average estimate of 1.96 billion pounds from analysts’ forecasts compiled by the bank.

Barclays’ profit was bolstered by a stellar year for its investment bank, which in common with U.S. peers reported strong revenues from its equities and fixed income businesses as customers traded frantically in volatile markets in 2020.

The fixed income, currencies and commodities unit reported a 53% increase in income, as swings in global interest rates and prices of commodities such as oil drove activity.

Equities saw a 31% rise in income while banking fees rose by 8%.

Wall Street banks such as Goldman Sachs and Morgan Stanley also saw fourth-quarter profits sail past analysts’ estimates, as coronavirus-induced volatility coupled with the impact of the U.S. elections boosted trading.

Barclays saw impairments from bad loan provisions related to the pandemic dip to 492 million pounds in the fourth quarter, giving a full year total of 4.8 billion pounds.

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