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Bonus row to reignite at Barclays and HSBC

BARCLAYS and HSBC will risk stirring up more public anger over bankers&rsquo; pay tomorrow when they are likely to report strong third quarter results &ndash; and bumper bonuses to match.<br /><br />Both Barclays and HSBC avoided taking Government cash to survive the global financial crisis but that is unlikely to protect either from criticism over the level of cash hand outs to top staff.<br /><br />Barclays, which is set to pay out &pound;5bn in salaries and bonuses this year, will reportedly go on the front foot this week and lay out plans for a bonus scheme of &ldquo;restraint&rdquo;. <br /><br />Chief executive John Varley is expected to pre-empt demands by the Financial Services Authority by paying bonuses largely in shares rather than cash.<br /><br />Barclays&rsquo; overall bonus pot is tipped to shrink in 2009 but each employee at its investment banking operation BarCap is still in line for an average &pound;200,000 hand out. <br /><br />A headache for the boards of both Barclays and HSBC is that investment banking profits have grown rapidly in 2009 and top bankers expect bonuses in line with their industry peers.<br /><br />At HSBC, which last week slashed a further 1,700 staff in mainly regional offices, investment banking is set to report record revenues of &pound;10.8bn in the third quarter.<br /><br />Analysts expect Barclays to report surging returns from BarCap, which includes parts of the collapsed Lehman Brothers, with revenues expected to be &pound;4.6bn. <br /><br />Overall, Barclays is expected to post third quarter profit of &pound;1.5bn and remain on track for an annual result that could top &pound;11bn, according to some estimates. <br /><br />The full-year result will be enhanced by about &pound;5bn from the sale of Barclays Global Investors to BlackRock. <br /><br />Analyst Keith Bowman at Hargreaves Lansdown said a recent Barclays statement showed it was tracking at the same pace as the first half, when revenues climbed 37 per cent and profit was up eight per cent.