03 August 2009 Credits: www.skynews.com
Bonuses Back As Barclays And HSBC Make £3bn

Barclays and HSBC each made £2.98bn profits in the first half of the year as bankers prepare for a return of bumper city bonuses.

The Barclays and HSBC buildings at Canary Wharf



The Barclays figures came amid reports some executives have amassed £250,000 bonuses for six months work.

The bank's profits were up 8% as income increased by 37% to £16.25bn.

At HSBC, profits fell by 51% after the bank had to write off £8.3bn of loans - a 39% rise in bad debt.

Barclays, meanwhile, had to write off 6.8% of credit card loans as cash-strapped spenders hit the buffers in the recession.

And for the first time more than half of Barclays' income - 51% - was generated from outside of the UK.



Credit card debts written off

Staff costs at Barclays increased 36% to £4.8bn and the bank said this was driven by a 32% rise in salaries and incentive payments, primarily in Barclays Capital.

The news comes after reports that executives at the division are in line for pay and bonuses worth an average £250,000 for six months' work.

That amounts to almost £1,500 a day.

Chief executive John Varley said: "The environment has remained very difficult in 2009 as a consequence of the onset during 2008 of economic recession in most parts of the world in which we operate.

"Our strategy has helped us weather the crisis and we want our employees, customers and shareholders alike to continue to benefit from it over time."

Barclays managed to shore up its finances in the crisis without a Government bail-out.

The bank instead turned to Middle East investors for funding and has also agreed the £8.2bn sale of its Barclays Global Investors fund management division.



Bank chief John Varley

Barclays' shares fell to lows below 50p in the dark days of January, but have recovered to trade around 300p as fears of state intervention passed.

There has been mounting speculation that City bankers are to reveal a return to bumper bonuses.

The Barclays figures could spark further outrage from staff already angry at the closure of the bank's final salary pension scheme to around 18,000 existing members.

Less than a year ago several British banks were bailed out by taxpayers to the tune of £37bn.

HSBC launched the biggest cash call in UK history - £12.5bn - after problems in its US Household lending business, which was one of the first harbingers of the credit crunch in February 2007.