Barclays profits down by 9pc
Barclays today reported a 9pc drop in quarterly profits after it saw a sharp fall in income from its investment banking arm.
Pre-tax profits fell to £1.66bn (€1.87bn) in the first quarter of 2011 after revenues at Barclays Capital dropped 15pc to £3.3bn (€3.7bn) as the group dealt with "a challenging external environment".
The update came as Barclays prepared to face a potential shareholder rebellion at its annual meeting over plans to award chief executive Bob Diamond a potential pay package worth up to £27m (€30m).
Total income, excluding insurance claims, was down 8pc to £7.4bn (€8.35bn) reflecting the "subdued macroeconomic environment", while its corporate and investment banking arm saw underlying profits decline 14pc to £3.4bn.
The group hailed the results as a solid start to the year and pointed out that underlying profits, excluding charges for its own debt, increased by 10pc.
Impairment charges for bad loans reduced by 39pc to £921m in the quarter. It also said it had taken control of a $10.25bn (€6.98bn) loan to former employees, known as Protium.
Today's results will increase pressure on the bank to justify its plans for executive pay at today's annual meeting.
The issues troubling investors include plans to award Mr Diamond a basic pay package of £1.35m, which is some 23pc higher than that of his predecessor John Varley.
Mr Diamond is also set to receive a bonus of £6.5m for 2010, a future conditional share award of £6.75m and £13.8m of shares that he is owed as part of previous long-term performance plans.
The bank also plans to pay some of its staff bonuses in contingent convertible bonds, known as "cocos", which some investors think are too generous.
These would effectively see staff receive interest of 7pc a year on their bonuses, meaning that they will earn extra money while they wait for them to mature in three years' time.
Investor body Pensions & Investments Research Consultants (PIRC) have advised shareholders not to vote through the remuneration report, while the Association of British Insurers (ABI) has flagged it up as something that needs the careful consideration of investors.