Barclays '08 Net Falls 1%; Scraps Bonuses

The U.K. bank said executive directors won't receive bonuses in 2008 and it won't pay a dividend for the year.
Publish date:

Updated from 2:51 a.m. EST

Barclays PLC

(BCS) - Get Report

reported 2008 earnings of 4.4 billion pounds ($6.5 billion), a decrease of 1% from a year earlier, as the U.K. bank faced what it called 'strong headwinds" during the period and it wrote down 8.1 billion pounds worth of assets.

In a statement Monday, Barclays said executive directors won't receive bonuses in 2008 and it won't pay a dividend for 2008. The company said it will begin paying dividends again in the second half of 2009.

Pretax profit for the year dropped 14% to 6.1 billion pounds from 7.1 billion pounds. The bank previously forecasted pretax earnings above forecasts of 5.3 billion pounds.

Barclays said pretax profits in its global retail and commercial banking operations rose 6% to 4.4 billion pounds, while pretax profits in the company's investment banking and investment management fell 24%.

Britain's third-largest bank by assets released its earnings early to soothe market fears over its balance sheet strength.

Although Barclays has not used the British government's recapitalization scheme -- opting to raise funds from the Middle East instead -- it is likely to take part in other forms of public support to the sector, such as the British government's plan to insure the banks' toxic assets.

Barclays said it was reviewing its compensation arrangements to ensure they "evolve appropriately."

"Our endeavour as we do this is to maximize the alignment between these and the interests of our owners, as well as to ensure that our compensation policies and practices are appropriately benchmarked to changing best practice in the industry," CEO John Varley said.

Barclays said that managing its bad debt and asset exposures in 2009 will be its priority.

"Whilst we expect there will be further charges as we work down these assets, we also expect that gross writedowns in 2009 will be lower than the levels of 2008," Varley said.

Copyright 2008 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed. AP contributed to this report.