Barclays announces big profits for 2009

In total Barclays raked in a total of £31billion of income for the year.

Chief executive John Varley acknowledged the bank had benefited from the Government-backed measures, such as quantitive easing, even though Barclays received no direct financial assistance from the state. But he insisted the strong performance came as a result of "responsible" banking in a difficult environment.

Staff, particularly those at Barcap, are in line for bonuses, although Mr Varley and Barcap chief executive Bob Diamond are forgoing theirs. The bonus pool has been reduced to £2.7billion due to the one-off bonus tax, with most of the reduction being borne by senior executives. Mr Varley defended the need for bonuses.

He said: "I hope you can see a bank that is sensitive to the mood of the world, and we are. Barclays Capital's profits were up 90 per cent and it was catapulted into the top 3 in the world after its acquisition of Lehman Brothers.

"People are at the heart of that performance and we depend on the quality of those people. We've got to be sensitive about how we pay them, but we have an obligation to our shareholders and customers about the quality of the people we employ."

The higher tax regime has prompted some in the financial sector to move abroad but Mr Varley insisted Barclays were committed to keeping their business British, and retain their headquarters in Canary Wharf.

He said: "Most banks want a predictable tax environment, but it's become less predictable in the UK over the last year. It creates an unsettling environment for business and affects the ability to recruit and retain the best people. So it is a worry.

"But the advantages of being in the UK for a big bank are good. The Government, of whatever hue, wants to make the UK a congenial place for big business."