Barclays resumes dividend payouts as annual profit halves

Barclays has resumed modest shareholder payouts after a year-long hiatus due to the Covid-19 pandemic, setting expectations other British lenders will follow suit when they report 2020 earnings in the next few days.

The resumption came as Barclays’ profit fell by half, 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.

Barclays’ shares, however, fell as much as 5 per cent after the payout plans and a vague outlook set out with no profit targets left investors underwhelmed.

The bank said its returns were likely to improve “meaningfully”, without giving any numbers, and said pressure on income at its loss-making consumer business was likely to continue over the medium term.

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The investment bank outperformance is also unlikely to last, analysts warned.

Barclays reported a profit before tax for 2020 of £3.1 billion (€3.6bn), well above an average of analyst forecasts of £1.96 billion. – Reuters