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Barclays: Even the bad times are good

Robert Peston | 08:01 UK time, Monday, 3 August 2009

The most resonant measure of how well Barclays has performed is that the average pay and benefits of the 22,000 people who work for its investment bank, Barclays Capital, was almost exactly £100,000 for just the first six months of the year.

Barclays bank logoIn other words, investment banking is booming again - with BarCap's profits doubling to more than £1bn, partly thanks to the frenzied attempts by big companies and governments to raise vast amounts of new money.

Across the group, Barclays income has soared 37% to £16.3bn, more than enough to absorb a rise in bad debts caused by the worst global recession since the 1930s.

Charges for loans going bad rose more than £2bn to £4.6bn - and there were £3.5bn of losses on investments, many of them related to the depressed property market in the US.

Because other banks have suffered more from the recklessness of their lending and investing, Barclays has been able to expand its share of the market.

But although Barclays managed to survive last autumn's banking crisis without a direct injection of capital by taxpayers, and it wasn't semi-nationalised like Royal Bank of Scotland and Lloyds, it has benefited from significant loans and guarantees from the public sector.

Barclays benefits from a promise by taxpayers that we won't ever let it fail, because the damage to the economy would be too great to contemplate if it did go down.

So perhaps the biggest risk for Barclays may well be that, when the better times return, it may well be perceived to have become too profitable on the back of taxpayer support.

And what's also likely is that pressure is likely to grow for some kind of separation between BarCap - the high-paying bit of Barclays that is perceived to be riskiest - and the retail bank that looks after the savings of millions.

UPDATE, 10:05: The story at HSBC, which has also reported first half results, is of resilience in the face of extraordinary losses on loans.

HSBC's charge for loans and investments that have gone bad was $13.9bn, almost $4bn higher than in the same period of 2008 (this UK-based global bank reports in dollars).

Much of that loss is - yet again - the consequence of bad lending by Household International, the US subprime lender bought by HSBC in 2003.

Since then, Household's poor-quality loans have generated tens of billions of dollars of losses for HSBC.

In fact, a calculation by Bloomberg shows that HSBC has incurred writedowns and credit-market losses of $42.2bn since the third quarter of 2007, the onset of the credit crunch.

That's more than double the disclosed charges for losses and investments that have gone bad at Barclays, for example.

But HSBC remains in profit, to the tune of $5bn before tax in the six months to June 30 - which is not a disaster, although it's less than half what it generated in the same period of 2008.

There was a fat $3.7bn loss in North America (of course), more than offset by $3bn of profit from Europe, $2.5bn of profit from Hong Kong, and $2bn of profit from the rest of Asia-Pacific.

Of all the big banks in the US and UK, HSBC is the one that comes closest to being able to claim - without stretching credibility too much - that it's a proper commercial operation, not too reliant on finance or insurance from taxpayers.

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Comments

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  • Comment number 1.

    They should make profits with the gap between savings and lending rates.

    Another back door tax by Brown and the banks to shore up the profits and pay for their past reckless lending. All at the expense of the public yet again and all whilst the Quango's and Agency top brass continue spending tax payers cash like its monopoly money.
    Another reason why Labour will get slaughtered at the next election, sadly "Call me Dave" will be much of the same so I suspect the fringe parties will continue to grow and get the votes of the diminishing number of voters who bother to vote in our flawed system.

  • Comment number 2.

    Another inept comment?

    NR, RBS, HBOS...was the problem their investment bank? From what I see diversification between retail, commercial and investment bank seems to work rather well for Barclays. The problem is not investment bank or not it is good risk managment or not!
    Concerning the use of taxpayer money. One of the roles of central banks is to provide liquidity in time of crisis to banks on the back of a strong balance sheet. The problem is when central banks provide liquidity on the back of weak balance sheet. Barclays has a strong balance sheet.

  • Comment number 3.

    I think you mean per employee which produces a very large total for labour costs and widely outlying the market conditions for staff. It would be interesting to see an analysis of the distribution of this remuneration given that the average national wage is around £25K. This also reflects the effective subsidy of extreme high incomes of the few by the modest incomes of the many (govt support). While the government cannot fix the salaries of a private institution they can set income tax levels to ensure the well healed make a proper progressive contribution to public finances that have been plundered so by the City. If Barclays is too big to fail they need to be publicly supervised not regulated. The Govt have behaved so that the banks' management know ultimately there is no real risk.

  • Comment number 4.

    So does this mean the Treasury can expect to be compensated with some bumper tax gains from this income...or will Barclays be allowed to continue to be the leading bank at tax avoidance practices?

  • Comment number 5.

    What does a headline number of £3bn actually mean? Is this being generated by asset sales, new lending, margin differentials or what?

    Also, given that Barclays sold themselves to Qataris rather than HMG, are they generating the necessary returns required for the new shareholders?

    Perhaps more pertinent questions Mr Peston.

  • Comment number 6.

    Remove half the opposition players from the football match, take the goalie out of the goal mouth and watch the striker score goals. Lovely game! But is it football?

    Barclays is the lucky team this time. Perhaps we should randomly select another bank for the year to ply their trade on such favourable terms?

  • Comment number 7.

    So if we don't have a "market" anymore (unsupportable business, to big to fail) can we have regulation back please?
    Oh and give us back the money they've charged us for the loans they needed for us to support them.
    Does it have to be this complicated?
    Mr Micawber (Dickens) knew, as did Karl Marx and to some extent Keynes who tried and succeeded in mixing the economy to reflect the needs of people and the government.
    But, back then we only had 2 or 3 Global players.
    Regulation, regulation, regulation.

    £100,000 each ?
    UK Average wage is £21,000.
    Tell me how they are worth an average of 5 times the pay of the average worker.?
    This isn't economically sustainable is it?

  • Comment number 8.

    Do you know know of any political party in the UK that has the will and stamina to enforce a separation between investment banking and retail banking? Where are the political leaders with such courage and independence? Does the political freedom to really govern the banks really exist in the UK?
    Barclays has 500 billion British Pounds in derivatives amongst its assets. We need a better analysis and public understanding of the real effects that these 'financial weapons of mass destruction' (Warren Buffet) have for the well-being of economies.

  • Comment number 9.

    These profit figures are a disgrace when Barclays have failed to pass on the huge reductions in BoE base rates to many of their customers. If you are a customer of Barclays First Plus please sing the e-petition on the No10 website calling for them to pass on interest rate cuts; they were quick enough to puts rates up when the BoE base rates rose!

  • Comment number 10.

    It is your last paragraph, Robert, that is the most important. Let us suppose that the highly conservative and cautious accountants that compile Barclays accounts and the even more conservative and cautious people who audit them have it wrong. Just imagine the consequences if the profit of Barcap was severely negative in the light of knowledge not yet emerged.

    This is precisely what happened with the sub prime crisis. We have the possible seeds here of another crisis which none of us understand.

    To protect businesses and savers, it is absolutely vital that the speculative arm of every bank is a seperate corporate entity quoted seperately on the Stock Market that cannot bring down the rest of the bank.

    At the moment, it seems as if Barclays have learned nothing from their narrow escape over ABN. It is THEM who should be bringing a plan forward to break the bank up, and if they won't do it, this supine government shoulod do it for them.

  • Comment number 11.

    Some reasons why Barclays made such a big profit:

    1. A lack of competition from their Nationalised domestic rivals in the banking sector.
    2. They saved £2 billion from a previous cancellation of dividends.
    3. £4.5 billion was raised from private investors, a significant amount of which came from the Qatar.
    4. Barclays also received billions of dollars from its insurance arrangements with AIG, including $8.5bn from funds provided by the United States taxpayers to bail out AIG.

    Also, Barclays has confirmed that it is planning to sell its exchange traded fund business, iShares, which is expected to earn the bank up to £5 billion.

    Why have you failed to mention any of these details in you're report Mr. Peston?

  • Comment number 12.

    Just shows nothing has changed.Its quite clear that investment(Gambling) banks need to be separate from retail banking.Why lend to small/medium size businesses when you can double your money on large complex deals that are probably adding no value to to UK economy but just bonuses to the elite few.Remember Barclay's escaped bankruptcy by the skin of their teeth ,when RBS got ABN Amro.

    PS Will be interesting to see how Barclay write downs compare to the others?

  • Comment number 13.

    It is disgraceful!

    Are we the people who save the banks about to see some of that money coming our way? Obviously not. The dole queues are growing, and those in them are labelled as lay-abouts, good for nothings. It is they, who are paying the biggest price with their lives, their futures and their health. It is they who should benefit from these profits. Certainly not the city spivs who made the mess in the first place.

    Let's be clear. If they, the banking industry, don't hand over the profits to sort this country out, then never again should a taxpayer in this country be asked to help a single profit-making company. Someone has to learn, somewhere.

    If they 'need' to be in the wonderful markets, then they will have to learn to stay there, live with their decisions no matter what the markets throw at them. If you choose to gamble, then you must live with the gamble.

    Haven't these big fat people just pulled the biggest con trick ever? Where are the police? Where are the prosecution services?

    Personally, I'd be mortified to recieve a salary like that from any of these organisations; how on earth can they look themselves in the mirror, or anyone else for that matter?

    Varlay says he is 'sensitive' to the issue? Really! Is that it?

    The impact isn't being felt just here with our expanding dole queues. The poor of this planet are in a worse situation now then they were a few years ago. The banks gamble and leave millions will starve.

    Sensitive isn't good enough. Sorting out the unemployment food problems on a global basis without earning a penny profit just might be a bit more convincing.

  • Comment number 14.

    #4 BankSlickerminustheR

    Before more tax is being paid to the Treasury, the bad assets have to be written off first (paying for old mistakes, speculation gone wrong). It seems that Barclays has allocated 646 million British Pounds in taxes for the current half-year.

  • Comment number 15.

    And they can only offer me 3 per cent on my savings

  • Comment number 16.

    So!
    How much tax do they pay UK Government.?

  • Comment number 17.

    Barclays wrote down their toxic investments far less than other banks. If you have an accountant willing to sign off on that it's amazing how well you can do. If they had marked to market they would have been in the same position as RBS and Lloyds. Barclays are just better at playing the game but it doesn't mean they have less toxic assets. Well will we force banks to open their on and off-balnace sheets.
    Until that time investing in any of the banks is pure gambling. We can assume the governments will not force them to open up but if they do watch the shares colapse.

  • Comment number 18.

    The shareholders of Barclays did not receive dividend last year, as part of Barclays plans to avoid government bailout. However all I seem to be seeing in the news is the huge profits they are making and now this morning how big bonuses are to be paid to employees. Small shareholders such as myself rely on dividends to boost pensions and improve living expenses. Why are they getting away with this. Maybe we shareholders are getting inflated dividend next time somehow I dont think so. The fat cat wins again.




  • Comment number 19.


    From an economic perspective (Modern Portfolio Theory), a firm doesn't "need" to diversify (such as combining retail & investment banking) as shareholders can do this themselves by building a portfolio of appropriately risked companies (i.e. spreading their bets).

    So why the convenient marriage of Investment Bank & Retail bank? There is no real business benefit in doing it (from what I can see), and no real strategic economic reason. Surely, the biggest reason for doing this is the unlimited state backed guarantee; the shield designed for retail banking now covering the speculative (riskier) investment banking. We are then left with the unpleasant conclusion that it is for financial hegemony alone.

    This is privatised profits and socialised risks. And I don't just count the shareholders as sole benefactors of the privatised profits, but also the 22,000 employees whose pockets have been lined in this pernicious manner.

    It may be legal, but will soon be shown to be highly venal. A most potent recipe for forthcoming social unrest.

  • Comment number 20.

    Lets think about this bumper profit, if the banks, Barclays included think that this country is out of the woods yet, then they are living in cloud cookoo land, The UK has a massive debt to repay and the only way it will be able to repay it is by charging the COMPANIES, BANKS AND WORKERS more in tax, as soon as this starts and the taxes start to rise, i believe we will see not only a return to the worst Recesion since 1920, but even further into recesion this country will slide, until this debt is repaid there is no chance for this country, At some point these giant companies will have to pay back what they have taken for so long,

  • Comment number 21.

    A 3 billion profit hey, that's great news. May i suggest typing the words, Barclays and redundancies into google. This brings up the answer to where much of the cash has come from especially when added to their other sell offs and cuts. The problem comes when, now they have made the cuts, where is the cash going to come from? The consumers makes up 70% of the economy whilst government makes the other 30%. With unemployment soaring, leading to reduced tax payments, and government expenditure increasing, we can see that all these people are doing is arranging the deck chairs whilst trying to suck as many people as possible into the stock market so they can offload their shares before the next leg down.



  • Comment number 22.

    Another point about these figures is the reduction in assets or lending. Barclays has significantly reduced the amount it loans out ie it is hoarding money. I am sure the various other banks will have similar figures, increased profits while hoarding more money. Marx noticed the tendency back in the 1850s and 60s. The result is that all our money is being handed over to banks which are then sitting on it. Other enterprises could have used the money to build things and restart the economy in that fashion. So not only are we being fleeced by the banks but governments slavish attitude towards them is prolonging the recession.

  • Comment number 23.

    Here's an idea.
    Why don't the banks introduce the SAVERS' BONUS?
    Instead of hogging it all themselves, which is resulting in an ever-increasing barrage of public verbal abuse, they should dish out half of all their "profits" to their savings customers.
    Everyone would feel better, the public would shut-up, and most savers would have some of their money with any bank that did this.
    Million pound bonuses for thousands of bankers?...or a nice few hundred quid bonus for each saver?
    All the complaining would stop, and it would be very good for business.
    After all, banks are making their current profits on the backs' of hammered-down savers....a chimpanzee could make big money if he's borrowing at 0% and lending at 10%.
    Savers are losing a fortune....give them a bonus.
    Savers are losing in 3 ways......cash, loss of services, and higher taxes.....give them a bonus.
    "But unlike shareholders, savers are not taking a risk".....oh yes they are. We have seen that they are also going to be clobbered for losses, but in an indirect way.
    The SAVERS' BONUS.
    Brilliant idea if you're a saver, but bankers will cringe at the prospect.

  • Comment number 24.

    What do you people want? A bank which is sufficiently well-managed to survive the worst global financial crisis without the need for vast sums of tax-payer support? Well here you have it, it's called Barclays.

  • Comment number 25.

    Well, I have changed my mind. Many poeple thought Barlcays reliance on tax schemes run by Roger Jenkins was going to hoel them eventually, in the end, byt relying on this instead of mortgages and the property market they have come out on top.

    Even better, they lost out on ABN Amro and instead were able to pick up Lehman Brothers.

    What a great year for them

  • Comment number 26.

    Barclay's (and HSBC's) 'profits' are the direct result of two factors first their monopoly position and second the (wrong and over long) zero interest rate regime of the central banks. (Get rates up NOW!)

    Both of these situations are the result of bad regulation! BUT NOBODY (has yet) SACKED THE REGULATORS!

    Time (again) for a special banking tax I think....

  • Comment number 27.

    #19

    "Modern Portfolio Theory" does not provide a economic perspective. It might be all right for textbooks but it is simply not true in the real economy. CAPM, efficient market and so on do not work in the real economy. If you have a look at economic cycles for retail, commercial and investment banks observations seem to indicate that they are not in sync which would provide stability on top of some diversification. Economy of scale/know how and funding would have positive effects too. Once again the issue is about risk management. NR had a massive funding issue and non sustainable business model. HBOS has massive concentration in their commercial book and RBS...well they did not seem to bother with risk at all!

  • Comment number 28.

    Blood sucking parasites the lot of them!

    What a lovely situation to be in, to know that no matter how big the losses that Joe Public will be there to wipe your backside for you. Then when you have pulled your trousers back up, you find that the opposition have gone home leaving you with the score still being counted whilst you shoot into an open goal. The beautiful irony being of course that the very people who have bailed the system out are the very same people who you are then able to rip-off. In Barclays case, it is even better as they were able to line up some friendly Qataris in order to avoid the gaze of the very people who bailed out the system itself. They could hardly fail to make money with half the banking system destroyed and the other half operating with one hand tied behind its back, courtesy of HMG.

    Vince Cable is right, all earnings (ha, ha) over £50,000 in the banking industry should be published. Name and shame these parasites so that they can explain to us in person over a couple of pints why exactly we should pay them this money.

    Real wages for profits that don't really exist. Then when the truth comes out we pay to bail them out so that they can continue doing what they did before. You couldn't make it up. As for leaving the country, I'll pay for the air tickets out, it's cheaper! Good riddance to bad rubbish. Liars and thieves.

  • Comment number 29.

    One aspect of results reporting before the credit crisis was the transparency of those results being reported. Seemingly no one knew the extent of liabilities, (which probably means only a actually handful knew.)

    Are we any further forwards? Barclays results are probably meant to be re-assuring. Given past results and no new accounting regs is it likely that the results are as hollow as their 2008 ones?

    Also heard John Varley commenting on Radio4 this morning. Whilst he said the recent experience had been humbling and bankers needed to be apologetic, he was very reluctant to acknowledge that global taxpayer assistance had kept Barclays alive. At one point he was, less than humble, insisting that bank's were too important to any economy to let fail and on that basis deserved nothing less than to be supported! He also refused to accept any notion that losses were being nationalised and profits privatised, inspite of appreciating that taxpayers had given the banking industry assistance.

    He also insisted that, on the basis of his banks reported profits, he had every right to deny the need for the banking industry to restrict pay and bonus levels. But there again, can everyone else be reassured by these results if the top director seems to want to live in denial (along with the less than transparent accounting regs?)

    In One particular comment he insisted the reason for their profits was their customers, (rather than commenting it was due to the staff,) implying their customers deserved a bonus, not the staff? Sadly, as many have commented, including The Chancellor, banks have substantially increased their mortgage lending Margins and will inevitably be looking to increase fees and charges (current account charges before long?) on all their products. So you, the customer, will have to pay for the loss making trading activities, rather than the bankers themselves via diminished or even zero bonuses. In fact when does a banker NOT earn a bonus?

    Sadly the industry will almost certainly get away with this because of customer inertia, (you can't be bothered to transfer your account to a competitor,) and because banking competition has been reduced by the credit crisis.

    BarCap should certainly be separated from its retail operation. It is scandalous that Government has not taken the initiative and set out plans to do this. Yes, retail deposits should be protected. But it is ONLY retail deposits that should be protected and NOT the Derivative Trading Losses as well!!

  • Comment number 30.

    The effect of the bail-out is that money is flowing from the public to the bankers in the form of bonuses.

    Barclays may say they did not receive Govt money, but without the bail-out all the banks would have failed like dominoes.

    This is the biggest scam in history perpetrated by the banks against the public, with the collusion of this useless labour government.

    The media seem happy to um and ah and look on bemusedly, while people lose their jobs and their pensions get wiped out. How much longer can this be allowed to go on?

  • Comment number 31.

    Why does Barclays have X-Ray scanners for employees to get into the canary wharf orifice

  • Comment number 32.

    Robert, you wrote : "Barclays benefits from a promise by taxpayers that we won't ever let it fail, because the damage to the economy would be too great to contemplate if it did go down."
    And to a greater or lesser extent every bank has that kind of guarantee from hard pressed taxpayers. It's a pity that these bonus-obsessed bankers don't feel a responsibility to reciprocate with measures to protect their ordinary customers from failing - the damage done to them through unemployment, repossession, family break-up and insolvency is too great to contemplate. Especially when these calamities would be avoidable if banks would lend reasonably, stop cutting overdrafts with only a few day's notice and stop charging far too high interest rates and rip-off arrangement fees. Caledonian Comment

  • Comment number 33.

    Survival: Protect the people their land and lives

    Barclays: Even the bad times are good (for repossessions and foreclosures)

    Roberts: Wealth is all Relative (suckers)

    Plebians: I Need A Roof (Over My Head)

  • Comment number 34.

    Robert

    I read over the weekend that Fred Goodwin formerly of RBS said that about 200 of his employees earned more than he did. That probably means that their pension pots are larger than his as well.

    For a partially nationalised bank, why has it taken 8 months for this little gem to surface? What is UKFI for? Does it serve any useful purpose whatsoever?

    As for Barclays are they obliged to post high profits, rather than act prudently as they raised significant sums of capital from the Persian Gulf states?

  • Comment number 35.

    Windfall tax! Now!

  • Comment number 36.

    I believe the Baclays Bankers should be allowed to be paid any amount of bonus...so long as they are made to eat half of the money first!

  • Comment number 37.

    I am delighted Barclays made a Profit.
    They pay tax on that profit and we need that income stream for UK finances. Pension funds need them to pay dividends so that they can pay Pensions.
    Barclays employees keep their jobs , are not a burden to the state and keep paying income tax.
    UK Govt. does not have to bail Barclays out and become shareholders.

    Shareholders have been diluted and have seen their income and capital values fall heavily. That is a risk they must carry but remember that many UK citizens need Barclays dividends to help their income streams in retirement - either directly or indirectly.

  • Comment number 38.

    Rob,
    A real reporter would dig much deeper investigating bankster syndicates and tell us exactly who shot who.

  • Comment number 39.

    I don't think that this government is able to really deal with the bankers behaviour. In one sense the Blair, Brown , Darling and most of the labour party, from fundamentalist Blairites to MPs who just went along with are still operating in their "world view" in what Andrew Neill describes as the "Thatcher Paradigm" an obsession that "free markets" must be the way.
    It reminds me of a book I read many years ago about three female (it could just as easily be males) socialites, one of whom became obsessed with her partner; refused to believe that she had been rejected, was reduced to grubbing around in his dust bin to find something that belonged to him. There more clinging she got the more he abused her.She could not accept rejection ! I see this with Nu Labour , as Dianne About pointed "out the Blairites are in a daze". They have spent years from the prawn cocktail circuit to the "nod and wink" that they will not be really regulated. They can do no wrong; and NuLabour still hopes that the bankers will have them back, will do as they are told, will become lovers again ! As with the woman's lover, the bankers treat the Government with contempt, smirking behind their hands despite NuLabour showering them with Knighthoods. Ironically although the Tory party's record on ecomonic management is poor (Samuel Brittans book The Treasury-remarkable as Brittan says they when are the party of business )I think the banks maybe more frightened of the Tories and are TERRIFIED OF VINCE THE CABLE he is clever enough to know their game.
    No Labour government can satisfy the banks from Ramsey McDonald's debacle to Wilson's Gnomes of Zurich, the capitalists (sorry about the C word-why is it hardly ever used on BBC1, afraid of frightening the lower orders?)no matter how right wing they are. Mr Peston's interview with the boss of GEC is an example-he made an amazing statement 'don't make an enemy of us' unfortunately he should have been questioned more closely. Also he repeats the canard that the private sector is the only 'wealth creator', Mr Peston seemed to agree, NO, the public sector also- generates wealth I know, I was a 'factory rat' for 15 years (see 'Rivethead',Ben Hamper and Working for Ford,Hugh Benyon) making products and much profit for the capitalists,went to university became a teacher. There I developed more wealth than ever before, but of course it can't be measured. The GEC boss and Mr Peston perpetuates tne myth that the public sector, whats left of it, is a drag on the economy, is 'inefficient' a luxury we cannot afford -like universal family allowance !
    As Brian Inglis a broadcaster and historian wrote about 19 Century mill owners did not want laissez faire (let alone)they wanted laissez nou fair-let us alone; they were not against regulation, they lobbied very effectively for legislation-against workers 'combining'
    The much lamented writer Hugo Young got it right when he called NuLabour
    'Thatcher's Bastards' we are living with the consequences.

  • Comment number 40.

    Banking is in crisis.
    The government and banks want to stop the angry public outcry against "banking greed", but want the banks to continue to do business and make big profits.
    So every year, when it's "profits and bonus time", give the public a share in these bonuses and the outcry will go away.
    In future, if nothing is done, things may even get worse, with physical attacks on bank branches and offices possible and the financial structure in a mess.
    And if a large proportion of the bonuses were shared amongst the banks' savers (savings accounts are the screwdrivers and spanners of the banking world), the government tax-take may even increase.(bonuses to savers would also be taxable).
    Individual already-bloated bank staff may not be quite as bloated, but they'll survive very comfortably.
    The Americans might also consider schemes like this....most of us don't want elitism, feudalism, fascism or communism....we prefer fair democracy.

  • Comment number 41.

    #23

    And the chimps wouldn't make half as much mess at the tea party as a banker!

  • Comment number 42.

    The banks are like a parasite that has attached itself to our vital organs...
    We can't kill it without killing ourselves, and in keeping ourselves alive we will feed it while it gets first pick of all our nourishment. We can't even weaken it without weakening ourselves.

    Of course, some people see it as symbiosis (where both host and guest benefit)

  • Comment number 43.

    Message 7 - grumpynotoldman

    100,000 each ?
    UK Average wage is 21,000.
    Tell me how they are worth an average of 5 times the pay of the average worker.?

    It's probably got something to do with the fact they doubled the profit, and made over a billion, for their employer in difficult economic times.

    If my colleagues and I made that kind of dosh for our bosses during a recession we'd expect six figure salaries as well!

  • Comment number 44.

    Read my Article: 'Bank Profits will damage Economic Reform'
    http://my.telegraph.co.uk/pac/blog/2009/08/03/bank_profits_will_damage_economic_reform

  • Comment number 45.

    Take a step back and look at the big picture here....

    NR and others got into trouble (lets not debate the actual cause here for now) and had to be bailed out by the Government or allow the entire system to fail.

    Under the FIAT currency system the Government has no money, and it was forced to borrow from the banks (in the form of treasury issues).

    The banks who were not in trouble, are now making wonderful profits in Investment banking - mainly the treasury departments, especially as the rates offered are in fact excellent considering the near future of limited growth, low inflation and low interest rates. (bond / gilt traders profit from doom and gloom in the Economy)

    So HSBC and Barclays have profited from the money the Government was forced to borrow in order to save the financial system.

    If this little story was set in a bar with 3 strangers, it would be acceptable, but when you find out 2 of those strangers ARE ACTUALLY RELATED - then it becomes a STING.

    A STING the GOVERNMENT has just fallen head first into - and will expect us to pay back at a later date (through taxes and spending cuts)

    It makes a mockery of all those people who insist that the 'Public will make money from these shareholdings'.

    I wonder if these calculations take into account the interest we're paying on the money we borrowed to take up these positions? We may see a capital growth eventually, but any potential capital gain will be eaten up by the interest we're currently paying.
    The Government has options, 1 - to allow inflation to rise rapidly eating away their debt 2 - default on the loans 3 - Massive hike in taxes / cuts in spending - neither will be appealing for the prospects of the UK and unlikely to be taken by vote hungry MP's.

    John Varley was on Radio 4 this morning - saying "It's good that banks are back to making profits" - a view echoed by reliable Mr Peston.

    ....good for who exactly?

    Remember in all this that banks don't actually 'produce anything of value'. They don't manufacture goods or services (except financial ones they have created their own demand for)

    Think about it and come back to me.

  • Comment number 46.

    It has already been eluded to by some people, but the problem is not that HSBC and Barclays have made decent profits, but they should now do more for savers and lessen rates on loans offered to healthy businesses. In a sense, they have lessoned the burden on the government and the tax payer. #1 critises the current government policy again but try and put yourself in the position of many tens of the thousand people who work in the financial sector and don't take risks that have put us in trouble. For me, it shows that big banks are not always the worst run as projected by the opposition. For example - the non sensical approach to breakup Lloyds Group may go down well with the general public but does not impress many in the banking sector when Lloyds Group are already deeply committed to integration (spending ten of millions) between LTSB and HBOS with full time staff deployment and budgeting.

  • Comment number 47.

    #23
    Thats the idea of building societies.
    They don't ahve risky investments to generate big profits as they have no shareholders wanting big returns on their investments therefore they don't have to pay out big bonueses for these "Wizz-Kids" to gamble our money.
    As they don't have to pay out dividends or maximise the shareprice they can plow all that money into higher savings rates and lower cost loans.

    Theoretically at least.

  • Comment number 48.

    If you move that cornerstone
    The house will come tumbling down
    And you wont be Jamming
    You won't be Jamming no more

    The wise man built his house on the rock
    When it stood firm
    The foolish man built his house on the sand
    And when the rain came down
    So did the House to the ground

  • Comment number 49.

    #43 united887 wrote:

    It's probably got something to do with the fact they doubled the profit, and made over a billion, for their employer in difficult economic times.

    If my colleagues and I made that kind of dosh for our bosses during a recession we'd expect six figure salaries as well!

    -------------------------------------

    You obviously don't work for a bank then.

    So by borrowing money at 0.5% and lending it out at 6% plus ...as someone else posted earlier, even a chimpanzee could do that!

    Banks are not normal businesses!

    By your logic, they should in fact be fired given the fact that they are working for a monopoly company in a rigged market and only made a few billion.

    Now do you still think they justify their salaries and bonuses?

  • Comment number 50.

    Profits for banks come from organisations and individuals. Good profits mean the banks are taking funds out of the economy and lending them back at extortionate levels of interest.
    Barclays will loan £7500 to good credit individuals at 10.9% rates. Who is getting rich on this deal?

  • Comment number 51.

    Not only is this profit and monster salaries coming out of my and everyone else's paypacket, but the public sector jobs are being cut as a result too. A hundred ordinary people are suffering to keep each banker laughing.

  • Comment number 52.

    I appreciated the comment on Today this morning when an interviewee remarked that the banks own the casino so they can't fail to make money.

    However there are three elephants in the room:

    The taxpayer who is underpinning the casino.

    The toxic assets that the casino owners refuse to acknowledge.

    Retail savings are being staked by the house in the casino on a daily basis.

    I fear, which is a good word to describe my feelings, that public policy amounts to nothing more than a reflation of the bubble that burst late last year. Nothing has been done to prevent the bubble suddenly deflating all over again and so what is the risk to the taxpayer, saver and those employed in the real economy?

  • Comment number 53.

    #49

    Well I would not compare you to a chimpanzee for your idiotic comment as it would be extremelly cruel and unfair for the chimpanzee!

    Obviously no bank can found themselves at the BoE rate. These days probably more at BoE plus 150bps-200bps, then take the cost for expected loss, the cost of capital, including the fact that government has significantly increased the capital ratio for the banks and finally the oprating cost and you will see that your 0.5% comment is plain stupid...what about taxing stupidity? This would bring it seems a lot of revenue!

  • Comment number 54.

    #43 united887 wrote:

    It's probably got something to do with the fact they doubled the profit, and made over a billion, for their employer in difficult economic times.

    If my colleagues and I made that kind of dosh for our bosses during a recession we'd expect six figure salaries as well!

    -------------------------------------


    49. At 11:35am on 03 Aug 2009, DebtJuggler

    You obviously don't work for a bank then.

    So by borrowing money at 0.5% and lending it out at 6% plus ...as someone else posted earlier, even a chimpanzee could do that!

    Banks are not normal businesses!

    By your logic, they should in fact be fired given the fact that they are working for a monopoly company in a rigged market and only made a few billion.

    Now do you still think they justify their salaries and bonuses?



    Yes, because we live in a capitalist system. They made a huge (relative to most other UK firms) profit for a private company and as such justify their salaries.

    Also, some of your comments don't make much sense.

    1. Barclays are not a monopoly, they are competing with several big and poweful companies. With respect I don't think you quite understand what a monopoly is.

    2. "Only made a few billion" - making "only" a few billion in a recession is very good indeed i think.

    3. With regards to borrowing money at 0.5% and lending it to others at 6% - thats a good point. But the 100,000 salaries were people who work in the investment side of things, not the lending of money.

    I'm not sure if my last point was totally accurate as I don't fully understand how banking works - however I feel my first 2 points are completely correct.

    I am not in banking and don't know anyone who is so my apologies if you are an expert and im making a fool of myself!

  • Comment number 55.

    #43 united887 wrote:

    "If my colleagues and I made that kind of dosh for our bosses during a recession we'd expect six figure salaries as well!"

    Define 'made' - where was the money made? Who made it? and from where?

    If I blackmail someone in my street for money - have I made a profit?

    The genius of the system is that the players in it are so alienated from the actual consequences that they shall continue to act in the same manner as before. They have no connection with the underlying Governments, businesses and people - and therefore no moral guidance.

    I think Karl Marx raised the idea of alienation - he was talking about manufacturing processes - however here we have a new world example of the repercussions of alienation through the division of labour.

    I rode through the city on my way to work and I realised that apart from a few less people about - nothing has changed in the slightest.

    As far as the banking participants are concerned the crisis is over (well for them anyway).

    Little do they realise that they are in fact the masters of their own downfall.

  • Comment number 56.

    #40 stevewo wrote:

    'The Americans might also consider schemes like this....most of us don't want elitism, feudalism, fascism or communism....we prefer fair democracy.'

    -----------------------------------------

    ROFL!

    The banks push their agenda under the cloak of democracy. The further democracy spreads, the more debt junkies they can convert (Gordon Brown being the prime example).

    Haven't you heard the phrase 'debt salavery'?

    'None are so hopelessly enslaved as those who falsely believe they are free.' Goethe

  • Comment number 57.

    Given the state of the stock market at the end of 2008, making a profit from investment banking seems to me to be like predicting that night follows day!

  • Comment number 58.

    47 HardworkingHobbes.
    I take your point about building societies.
    "they don't have risky investments"?
    Property has proved to be a very risky investment recently, and societies are suffering great damage from reposessions.
    But I think that some sort of visible public participation at "bonus time" would calm the situation, and allow banks to prosper without any hatred or criticism directed against them.
    And "VISIBLE public participation" is perhaps key, (not hidden in rate complexities).
    A worldwide change in the way we conduct banking would be needed, because the public in all Western countries are totally fed-up with living in "Gordon Gecko Land"...
    One small sector of the community pocketing the lions-share of whatever wealth is around, at the EXPENSE of the rest of the community?
    That is politically unsustainable.

  • Comment number 59.

    "31. At 10:00am on 03 Aug 2009, Sir Azazello wrote:
    Why does Barclays have X-Ray scanners for employees to get into the canary wharf orifice "

    I am sure that this chap will find that the scanners are most likely there for visitors and not employees. Perhaps they are there to check for explosive devices being brought into the building????

    On a general point though, I am sure they say that the average income per employee meaning the average income for the bank per employee. Or perhaps I am wrong again.


  • Comment number 60.

    ....here's some additional reading material for the class....

    http://market-ticker.org/archives/1273-The-Idiocy-Of-The-Media,-Fed-And-Government.html

    As you can see, the GDP growth figure has been skewed by the very debt which has been pegging itself by the same GDP figure!!

    To the lay man this means that the increase in debt made it look like the Economy was booming 20% more than it actually was - and this led to further lending as the reasoning was 'the Economy is doing well - so it's safe to loosen the reigns on debt, and bring down interest rates'

    The fact that the media and the central banks have kept this from us is a question I think Robert Peston could advise us on....?

    So Robert, is it a conspiracy, or are you, the Government and the banking system actually 'as thick as two short planks'?

    ....we're dying to know....

  • Comment number 61.

    Contentious issue: it wouldn't grind so much if bankers were more personable and less like salesmen. No I don't want a premium current account that will cost me £14 a month for you to bank my money... a good blog on this can be found here http://tinyurl.com/mbzyg9

  • Comment number 62.

    54. united887

    I was going to reply to this post pointing out all the crazy logic which it contains, however once I read this part:

    "I am not in banking and don't know anyone who is so my apologies if you are an expert and im making a fool of myself!"

    I realised where you are coming from.

    I don't think you are making a fool of yourself if you don't understand the intricacies of the banking system - mainly because it's deliberately made complicated to throw people off the scent.

    The banks are making FOOLS out of US, and that includes the dim-dim's down at the treasury.

    Watching this crisis unfold is now like watching an episode of "The Real Hustle" where you can see the person is going to get fleeced, but there is nothing you can do about it.

  • Comment number 63.

    Playing devils advocate Robert,what would happen if a chancellor was to announce that as from say 2020,No tax payer money would ever again be used to bail out a bank .

    Accountancy smoke and mirrors are going at full force, to as it happens put all these financial giants in a better light than what they really are.

    IMO we must put the onus on these institutions to put in place their own packages to secure their own debts.Until that happens this will happen again at some time.


  • Comment number 64.

    Difficult to decide who are the greatest robber barons of the 21st century. The Government who stole our money to prop up a corrupt banking system or the Bank that fleeces its customers with usurious rates and
    penalty charges on overdrafts and credit cards and boasts that its profits have soared to £37 billion. No
    Government or Bank is too big and powerful to fail - sooner or later. Wonder which will fall first.

  • Comment number 65.

    #57 code_runner wrote:

    'Given the state of the stock market at the end of 2008, making a profit from investment banking seems to me to be like predicting that night follows day!'

    ==========================================

    Why not then take out a huge loan (say at 10% APR) and buy a load of bank shares with it...you can't lose!

  • Comment number 66.

    Re 56 BankslickerminustheR.
    Yes, I know all about "debt slavery" from personal experience.
    And I agree 100% with Goethe.
    The last few years have rubbed-in Goethes' point exactly.
    "Just keep their house prices rising, and they'll all think they're loaded". Mug economics for mugs.

    Re 51 Gordonwest
    "A hundred ordinary people are suffering to keep each banker laughing".
    Absolutely.

  • Comment number 67.

    Yep, 'even the bad times are good' for the banks, but not for the rest of us.

    Presumably this is the end of the beginning; the banks have slipped through our fingers and are away scot-free meantime, without any real change to their ways of business, and without paying their bills. We are even paying them inflated fees to act as middle-men in the (printing of money) bond issues.

    We had hoped against hope that the UK and US governments would bite the bullet, seize control of the mess and make the necessary reforms. Fat chance (as we suspected).

    Fake numbers for recovery, growth, profitability, and future wellbeing will abound from now on, just to keep us in the dark. Expect 'green-shoots' statements all autumn. When you hear them, write down the messenger as a fool or a li*r.

    Round One is over, Taxpayer, 's children and 's grandchildren, lost big-time.

    Who is going to trigger Round Two? And how is it to be done.........

    Regards,


  • Comment number 68.

    Look here children
    It's going to get rough
    It's going to get tough
    You'll get crushed in the rush
    Straighten up
    Get on up
    Help them please
    It's going to be Rougher Yet

  • Comment number 69.

    I'm with GeoffK1874. How are these profits generated ? What do Barclays, and all other "investment banks", actually do in the real world to justify that sort of remuneration/profit ? Or indeed, what do they actually do in the real world at all ? Where is the added value they contribute ? Please explain Mr Peston.

  • Comment number 70.

    #60 writingsonthewall

    Great post and great link! (#45 was a gem as well!)

    Some person used to post on here regularly around a year ago (can't remember his/her posting name) about the exponential impossibility of usury (i.e. extortionate interest rates) and the FRB model. He/she used to take on anyone on who tried to assert that FRB was a feasible practice, and usually won the argument IMO.

    He used to goad RP about this, regularly asking him to write a piece about it...but to no avail. I raised the same question to PM on his blog, but again to no avail.

    Maybe you're right, either they are all in on 'it' or they are just totally incompetent.

  • Comment number 71.

    Robert, Any views on Moody's recent downgrade of Santander and what it means for British retail savers? http://www.moneymarketing.co.uk/cgi-bin/item.cgi?id=191080&d=340&h=341&f=342

    "Moodys has downgraded Banco Santander by one notch due to its large expose to the Spanish, US and UK economies. Moody's has downgraded the Spanish bank to Aa2 from Aa1 and has reduced its bank financial strength rating to B- from B."

  • Comment number 72.

    66 Stevewo "Just keep their house prices rising, and they'll all think they're loaded". Mug economics for mugs.
    That's the real problem this country now faces, the current govt won the last two elections based on a 'feelgood factor' of remortgaging to buy Unneeded consumer goods, mostly imported.
    The key point here was everyone who felt good, were actually paying for their own feel good factor through larger and longer term personal debt, that they would be responsible for. Not any real growth managed by the Govt.
    But the Govt took the praise for everyone remortgaging their own futures.
    The Banks were the vehicle the Govt could use for this scam, now the Govts Golden Goose(Banks) is sick the Govt is remortgaging our future to treat the Govt's Tarnished Goose.
    Without the bubble the Govt has been inflating for the last ten years, the lack of growth is obvious. So the Govt just wants to reinflate the bubble that got us into this mess again.
    Remember only one institution can legitimatly inflate and watch bubbles burst, and they play in Claret & Blue at the 'Home of Football' - not Downing St.
    P.S. They also won the World Cup in 66 - not England. That could spark a different debate! :-)

  • Comment number 73.

    If Barclays had performed poorly, you would have criticised them for not taking taxpayer money.

    Barclays has performed well, therefore you focus on comp. and accuse them of fleecing the taxpayer anyway.

    Some would see this blog - particularly the title - as just trying to incite a reaction from the uninformed...

  • Comment number 74.

    70. At 1:03pm on 03 Aug 2009, DebtJuggler wrote:

    "Maybe you're right, either they are all in on 'it' or they are just totally incompetent. "

    ....ahh the ultimate dilemna, corruption or stupidity. Well much as I like a good debate it doesn't really matter to the ordinary people of the country / world. Both are simply unacceptable and both will result in the same crisis.

    I do find it difficult to believe that the entire world media is in on it - however when you consider all media outlets are either run by Oligarths or the Government (The BBC) - I guess it's entirely plausible.

    I am preparing for war as we speak - not against Afghan's or Iraqui's - but against the Government and Finance industry - a mighty coallition but it will be up against huge numbers of unemployed and angry civilians.

  • Comment number 75.

    and next month they will cry poverty when customers ask for loans so there is no profit really just better bonuses for greedy rich bankers.

  • Comment number 76.

    The banks are back in profit, house prices are rising again, the stock market is up the pound is at a 10 month high!

    What is up with you grumpy lot.

    We are all saved!

    To celebrate I am going to buy grapes flown in from Chilli, some lamb chops from new zealand, all washed down with some wine shipped from Australia and some mineral water driven over from the italian Alps, served using plates and cutlery made in China cooked using gas from Russia.

    Of course I will throw 30% of the above away and not worry about how many non renewable resources have been burnt bringing them to my worthy door.

    let the good times roll again!! Who ever said this could not go on forever was surely a fool.

    hurrahh.






  • Comment number 77.

    #54 united887

    No hard feelings I hope!

    I admit that I may have exaggerated the monopoly bit for effect (however, remember it was Gordon who authorised the Lloyds take over of HBOS... thereby riding rough-shod over anti-monopoly legislation; thus reducing the competitiveness of the 'market')

    #62 writingsonthewall has covered the rest well!

    PS I'm not in banking, I just want to understand how the banks have 'soft soaped and shafted' us all. Alas they seem to have got away Scot free (no pun intended).

  • Comment number 78.

    "23. At 09:27am on 03 Aug 2009, stevewo wrote:
    Here's an idea.
    Why don't the banks introduce the SAVERS' BONUS?"

    Some places already do. As an example Britannia has a reward scheme for policyholders. Doesn't just apply to savings either. I have a very small mortgage with them and every year from this mortgage i've got a cheque for £50. The more policies you open up - say savings accounts, ISAs, insurance, loans etc - the bigger your bonus. Check it out on their webpage. Other firms do this too (have a look at the co-op who BRitannia are merging with. Since they have no shareholders they can redistribute monies back to policyholders this way. as i've said many times on this blog (which never seems to move off banking) you don't have to use one of the established banks - there is plenty of choice out there.

    If Barclays has an uncompetitive advantage due to being "state backed" in principle then what about National Savings and Investments!?

  • Comment number 79.

    73. At 1:17pm on 03 Aug 2009, FreedomIW wrote:

    "If Barclays had performed poorly, you would have criticised them for not taking taxpayer money.

    Barclays has performed well, therefore you focus on comp. and accuse them of fleecing the taxpayer anyway."


    Awww - poor liddle banky wanky's - did they get treated harshly?

    I heard that drivel from Varley this morning and it simply doesn't wash.

    The reality is that they have been making money during a recession - when every other business is making a loss (or see's a serious slowdown in profits).
    This profit is effectively 'borrowed from the future' and we won't see the consequences of it until much later down the line.

    Considering the current situation, surely it would be advisable for Barclays to hand over it's profit to the Govt. to repay the 'bad behaviour' of it's siblings (Northern Rock, B&B etc) losses.

    Now that the cash balance is restored at Barclays and asset prices are falling - there is no need to retain such large profits (because there is no competition from elsewhere at the moment i.e no need for expansion)

    ....or is it a case of 'my brother when it suits and not when it isn't'

  • Comment number 80.

    Re Islider55
    The "house price trick" is just mug economics for mugs.
    For decades Western governments have been scratching around trying to find a substitute for all that manufacturing that has been lost to the Asia.
    So they use this housing trick.....it works like the Klondike for a while before it all crashes into a heap. (it is currently receiving direct taxpayer support).
    Unfortunately for the rest of us, City bank staff took a huge slice of the "profits" from the last "trick boom", and have left the public looking exactly like what they are.....mugs.
    I prefer stability to these pathetic "stunt booms".

  • Comment number 81.

    I have two comments to make here;
    1. robbieBB wrote: "What do you people want? A bank which is sufficiently well-managed to survive the worst global financial crisis without the need for vast sums of tax-payer support? Well here you have it, it's called Barclays."

    I totally agree. People seem to enjoy kicking banks at the moment and nothing they can do is right. Barclays has successfully managed their risks and has not needed government, or more importantly my tax money, to 'bail' them out. You can not therefore penalise them for managing their portfolio well - and better than other banks.

    2. Robert Peston wrote: "The most resonant measure of how well Barclays has performed is that the average pay and benefits of the 22,000 people who work for its investment bank, Barclays Capital, was almost exactly £100,000 for just the first six months of the year."

    Barlays website states that they have over 155,000 members of staff worldwide, so it is therefore out of context to refer to the average salary of just one part of the business. I am sure that if you included the other 133,000+ members of staff into this statistic the average salary would be much, much lower that £100k.

    This is another example of the media twisting figures to make a news story. Shame on Robert Peston for cherry picking his figures to make a story appear more than it actually is!

  • Comment number 82.

    Democracy:

    A number of people on this blog are concerned that increased state control by the Government is imminent - and that will mean an end to Democracy.

    The fears are well grounded and I too do not throw my liberty away easily.

    However - have a think about this:

    Soon, the banks will own EVERYTHING, they already own our houses and our consumption (credit cards). Now the Government has made itself the biggest customer of the banks, they now have control over how much is advanced to Gordon, David or whichever moron takes over next year.

    In the current parlimentary system we still retain some people power. I do not agree it's Democracy, but at least the collective will of voters can make a difference and effect change.

    However once the banks are in charge (if they aren't already) - we will have a system where the boards make investment decisions and will ultimately be deciding if 'a school is built here' or 'a hospital built there' by controlling the reigns of Government debt.

    As we have seen, banks are NOT DEMOCRACIES. In fact usually a small number of majority shareholders (high net worth individuals) call the shots. A proven concept following some of the renumeration arguments. Is Fred Goodwin accoutable - clearly not as he was allowed to walk away freely from the mess he presided over (and in fact was rewarded for it)

    Therefore we are heading for 'Corporate Totalitarianism' where the CEO's of banks run our lives.

    Having seen their previous record I wonder if this is armageddon awaiting.

    Banks make decisions based on profit. Hospitals, schools, colleges etc. are not profit making businesses - and will therefore find funding hard to come by.
    Casino's, prostitiution and wars are profitable - and therefore will be much more favourable for investment.

    Does this sound familiar? Well wasn't some geezer banging on about this about 2009 years ago?
    I don't believe in God, but every day this crisis continues I cannot help make parallells between the crisis of today and the warnings written in the Bible.

  • Comment number 83.

    #76

    I forgot to mention I will be buying all of my celebratory goods on my barclaycard because I can not actually afford them at the moment but with the stock market, sterling, house prices and bank profits all on the up it cant be long before I can afford them again.

    I would also like to take this opportunity to thank the bankers and the city for once again coming to our rescue to maintain our living standards. Why should Gordon be the only one to get the chance to stand up in front of a room full of them and explicitly thank them also.

    Surely I cant be missing something can I ?

  • Comment number 84.

    I think there should be complete separation between the investment and retail arms of British banks. It was incompetent management, reckless speculation and government inertia within the investment sector that caused the banking crisis and all the resulting suffering. In future I think retail banks should be limited to good old-fashioned lending and savings so that the taxpayer is never again put in the position of bailing-out incompetence.

    It would be interesting to know how much of the profits derived from the investment arm of Barclay actually resulted from speculation with money invested by savers in the retail arm.

  • Comment number 85.

    Message 81 bethgreen331

    Barlays only survived the banking crisis because it was less exposed to bad debt than RBS and HBOS among others. However, the entire financial sector in Britain was only protected from a complete collapse of all banks by the UK taxpayer being conscripted by the government to step up to the plate and take on the burden of debt.

    So it is not true that Barclays survived due to its own virtues. Sure, they helped but if RBS & HBOS had actually gone the way of Lehmans what would be left of anyone?

    The banking sector in the UK has still not quite worked it all out: it is being subbed out of trouble by the UK taxpayer. A bit like British Leyland in the Seventies me thinks. So are the banks and bankers going to change their business culture? If they don't then its the knackers yard for us all.

  • Comment number 86.

    81 bethgreen331

    I think you mis-understand the concept of 'bailout' and what it actually did.
    The bailout was for the industry - not the individual bank. When NR was handed tax payers money to remain solvent - who do you think held the shares? Who do you think held shares in B&B or HBOS?

    If all of these banks above were allowed to fail, and the industry had been able to survive - the write downs for Barclays would have been HUGE.

    This is likely to have removed this profit announced today - and possibly even made Barclays insolvent (I noticed John Varley wouldn't answer the question Evan Davis put to him on the subject this morning).

    If you watched channel 4 news last night you would have seen exactly the same story emerging about AIG and Goldman Sachs. AIG was 'selected' to be bailed out - but if they hadn't then Goldman were one of their biggest bond/shareholders and would have suffered a dramatic loss.
    ....and like Barclays they have announced 'outstanding profits' - which of course they all attribute to their investment skill and craft - such is the limitness nature of their detracted arrogance.

    I agree the salary statement may be mis-leading - however if your stats are correct then this simply shows that not everyone in the banking system is in on the scam. In fact it shows how uneven the spread of wealth is within these insititutions and how there is a 'mug' on every street corner at the moment...

  • Comment number 87.

    Robert Peston is on a no-lose streak and he knows it. The public will accept any criticism of the banks whether or not it is backed by facts. He criticises banks that lend badly and have to be bailed out and then he criticises banks that lend sensibly and don't need to be bailed out simply because they make a profit.
    As regard to Barclays taking the dirham rather than shilling - the middle east investors have already sold out of some of their shares and view it as an investment not a bail out.
    Mr Peston may feel that the government would bail out Barclays but there is no explicit promise and when asked if the bank would take the Queen's shilling the bank declined the FSA offer for cash even though HMG were desperate to have control of Barclays as well as the other banks. Perhaps he should be asking why that was?
    And Mr Peston can rest assured that the vast majority of Barclays staff are not on GBP100,000 and likewise the majority will have neither bonuses nor pay rises as happened last year.

  • Comment number 88.

    80 Stevewo.
    Agree with most of your post, however the point on the City taking a slice.
    Do you not think this was more of a 'commission' as opposed to a 'robbery'? Agreed with the Govt, the banks partners in crime?
    Govt says to Banks - We provide the lax regulation to allow you to provide the lending we need to fund our latest bubble, we'll turn a blind eye to you taking your cut.
    The irony with this, is now that everything has hit the fan the Govt can only blame the Banks - otherwise it's obvious who was responsible - The Govt.
    But they can't really go to far against the banks, as without them their is no one to fund the massive PSBR.
    So it's quite apparent, what's really going on. Blame the banks as much as you like, they are private companies who's sole purpose is to return profits to their shareholders. They are doing this.
    The Govt has been caught with it's trousers down after getting into bed with the banks, and now they're lost blaming they're partners in crime. And some people are actually beleiving what's being stated by the Govt.

  • Comment number 89.

    Robert you miss the key point: If Barclays has £500 billion in derivitive positions, and they are not now being priced to market then all their figures are a joke. Since the priofit cam be wiped out with a true dose of realistic pricing.

    The case for separating Clearing form investment banking has now become impossible to deny. Clearing bank customers are getting nothing for their money, which is being used on a multiple of between 10 and 20,times to speculate in areas where no real time pricing is required.

    If Barcap want do it let them raise their own funds and sink accordingly

  • Comment number 90.

  • Comment number 91.

    Re 88 islider55.
    Yes indeed.
    RPs' article of last Friday talks about bankers "holding the public to ransom".
    Very true.
    You obviously agree, as do most of us.
    In fact, that RP article makes extremely good reading, particularily when your blood pressure is up.

  • Comment number 92.

    How short people's memories are, but then it's no surprise it is what business and government rely on.

    Folks no one has mention the following terms:

    Qatar
    33% for £7bn
    Preference shares
    Blair's Brother
    Artificially Inflated Market!

    If you won betting, on a rigged game, with money that isn't yours. I doubt you'd would be buying everyone a drink either.

  • Comment number 93.

    There Shareholders were massively diluted.

    Surely they should buy back those Shares BEFORE paying massive bonuses to their dodgy traders.

    How much shortselling did they do ?

  • Comment number 94.

    91 Stevewo

    I agree mostly, the main difference in my view is that I think the blame the bankers line from the Govt via Peston is a diversionary tactic.
    The Banks do not have to serve the voters, they serve their shareholders. And whilst they could get some very good PR by doing things suggested on this blog, they are under no obligation to.
    However the Govt do have to serve the voters (In priniciple anyway), and I feel that the main responsibility for this mess is the Govt, and they are diverting blame from themselves onto the banks.
    Unfortunately the Govt chose to Dance with the Devil in this decade long debt fuelled boom, by getting into bed with the banks.
    GB took the glory of - No more Boom and Bust, Golden Rule etc, when in reality all they were doing was managing the biggest bubble since the 2nd World War.
    And now they want us to beleive that it's all the fault of the banks, you can't have it both ways.
    I'm not saying the banks are innocent of any wrong doing, but if they are guilty then it is as an accessory to the Govts.

  • Comment number 95.

    I have waited since last night for my comment to be moderated. I have contacted you three times ; I am now going to contact Ms Stephanie Harris Head of Accountability Unit; Room 5601 stage 6; Television Centre Wood Lane London; W12 7RJ !

  • Comment number 96.

    Well, we know what level to impose the higher income taxes. Good times, make money, bad times, make money...seems like the right business to be in. Digital money is such funny stuff. Government prints money and unwrites loans so private banks (semi-public) can make risk free loans. Seems to me some of the profits should go back to the individual accounts that they so poorly mismanged that accounts were diminished by 25 - 30 %. Seems there should be some obligation in that area that both the banks and governments wish to avoid. The world is divided: Governments and banks on one side and people on the other...they used to call them highwaymen now they are called bankers. Would be good to teach the children about these name changes so they are not fooled in the same manner.

  • Comment number 97.

    I cant believe that banks are still paying themselves high bonuses after the devastation their greed caused. How about they pay some money back that the tax payer had to fork out and how about bonuses being monitored. The government have done nothing. Its the same with mps expenses, greed of few leaving the majority to pay, Im so angry.

  • Comment number 98.

    Well everyone, it's ten past six.
    If you're still wondering where all that money is going that should have been coming to you as interest on your savings, but no longer is......
    Worked it out yet?
    Yes, it's going into City bank staffs' pockets....and that's official.
    Savers get nothing.....those City boys load up again....

  • Comment number 99.

    Yippee!! Barclays made billions in profit!! Fantastic!! As one of the tens of thousands of Barclays First Plus customers being ripped over by these people it is good to see that they will have enough to pay back our mis-sold Payment Protection Insurance, plus give back the secret commission (up to 70%) that they added to these PPIs. They can also afford to reduce their interest rates to avoid an Unfair Terms lawsuit.

    This company put practices in place to screw the little guy and the people that came up with this idea are getting millions in bonuses. I know who I'm voting for next time round: the party that nationalises the banks and sacks these vultures .

  • Comment number 100.

    Not all Barclays corporate customers have 'chosen'to slash their overdrafts, as reported in the recent news report,reductions were forced upon them.

 

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