Barclays (LON:BARC) has tried to allay concerns that a likely contribution to his pension plan could delay the rebuilding of the bank’s dividend, the Financial Times reported. The news comes after the FTSE 100 group informed investors last week of its performance for the full year as it cut its payout to shareholders.
Barclays’ share price soared in today’s meeting, gaining 1.52 per cent to 229.95 pence (10:16 GMT), outperforming the FTSE 100 benchmark index, which currently stands at 7,317.50 points, up 0.74 per cent. The Group’s shares gained more than 45 percent last year and have risen by almost three percent so far this year.
The FT reported yesterday that Barclays Finance Director Tushar Morzaria told analysts at a breakfast meeting in London yesterday that the bank was “comfortable” that it had fully factored the likely cost of pensions into its capital projections for this year. Barclays is likely to contribute £1.25 billion to its main pension plan this year, and investors were concerned that this move could prevent the lender from returning its dividend to the level of two years ago, before the group drastically cut its payout to shareholders as part of its cost-cutting measures.
“Since our last triennial assessment in 2013, we have agreed a plan with the trustees of the pension scheme to make annual contributions to reduce the deficit,” the bank said, as the newspaper quoted, adding that the pension contributions did not affect its “confidence in the timely achievement of our ultimate goal”.
Barclays informed investors last week about the results for the full year and reported that pre-tax profits had almost tripled. However, the bank cut its payout to shareholders by half.
At 10:51 GMT on Wednesday 1st March, the Barclays share price was 229.75 pence.