BARCLAYS BEAT forecasts with a near doubling of profits in 2009 to £11.6 billion, cheering investors with an improved balance sheet and boosting shares in the sector.

Britain’s second largest bank by market value avoided a bailout during the crisis. However, it has still been hit by a backlash over banker pay, and yesterday said it had reined in payouts, with its two top executives declining a bonus for the year.

Its investment bankers will receive average pay of £191,000 for 2009, including an average bonus of £95,000.

With a compensation ratio of 38 per cent for its investment banking arm, down from 44 per cent, Barclays is broadly in line with its peers, just above Wall Street giant Goldman Sachs but below European rival Deutsche Bank’s 40 per cent.

“The bond of trust between banks and stakeholders has been damaged by the credit crunch and the economic recession. That bond must be restored to health by how banks behave – how we lend, and how we pay,” said chief executive John Varley.

Barclays ranks as the top earning European bank of last year, with profits up 92 per cent from £6.1 billion in 2008 – swollen by a £6.3 billion gain on the sale of its Barclays Global Investors (BGI) asset management arm. Underlying profit, stripping out the BGI gain and other one-off items, more than trebled to £5.6 billion, which analysts said was about 5 per cent ahead of expectations. – (Reuters)