More banker bonuses on the way this week

Big banker bonuses are back on the table amid a robust rebound in lenders’ profits, annual results are expected to reveal this week.

The City is expecting Barclays, which publishes finals on Wednesday, to register a £8.1bn profit haul, up sharply from £3.1bn in 2020 when the pandemic sent the banking sector spiralling.

Investors will be listening acutely to new chiefs at Barclays and Lloyds for their thoughts on strategy since landing the jobs last year.

The big four UK lenders have already posted a strong crop of results, with state-owned NatWest revealing last Friday operating profits hit £4bn last year.

Asia-focused British bank Standard Chartered ramped up its bonus pool for its top deal makers to around £1bn.

Barclays’ results will be the first for new chief executive CS Venkatakrishnan, who was parachuted into the job last November when Jes Staley quit after the initial findings of an investigation into his role as private banker to disgraced financier and convicted sex offender Jeffrey Epstein were shared with the bank’s board.

Known as Venkat, he was previously head of global markets for the lender, and has yet to outline what he plans to do in terms of strategy changes.

Bonus payouts will likely be a source of backlash for the bank, given they are expected to rise considerably on last year’s £1.6bn pool.

Soaring banker bonuses come as UK households are being gripped by a once-in-a-generation cost of living crunch.

Lloyds, the UK’s largest mortgage lender, follows with its results on Thursday. Fresh chief Charlie Nunn will set out his new strategy for the retail lending giant.

Profits are thought to have surged to as much as £7.2bn, up from £1.2bn billion in 2020, due to the bank benefitting from the release of some of its £4.2bn provision set aside to deal with an expected wave of Covid-related defaults.

UK banks’ net interest margin, a crucial source of profitability, have widened substantially due to the Bank of England lifting interest rates at back-to-back meetings for the first time since 2004, sending borrowing costs to 0.5 per cent.

A higher interest rate environment tends to boost banks as it allows them to charge more for loans.

HSBC reports tomorrow.