Decline in bad debts helps Barclays to £1.82bn profit

The banking giant said a decline in bad debts and improving financial markets helped it to notch up the first-quarter haul – which was 47 per cent ahead of a year earlier.

However, Barclays came under fire over pay and bonuses at its annual shareholder meeting in London.

The bank disclosed it has set aside about 1.4bn in pay and benefits to staff within its investment banking unit in the first quarter. Pay packages for top bosses at Barclays have likewise come under scrutiny, with shareholder advisory body Pirc warning that rewards on offer to senior executives were "potentially excessive".

Investor Robert Muriel criticised Barclays at yesterday's AGM, saying the bank had acted on pay only since the public furore over bank salaries erupted.

He said: "We finished up with (Barclays' president] Bob Diamond getting 27 million in 2007. He may not be getting the same sort of pay now, but he's hardly suffering."

Barclays stressed that money set aside for its investment banking team would only be confirmed after the year-end.

Barclays chairman Marcus Agius added that pay should be "competitive, but no more", adding: "We must, as an industry, admit our mistakes and show contrition."

John Varley, chief executive, said: "The improvement that we have seen reflects the signs of economic recovery now evident in many of the markets in which we operate."

Shareholders were largely supportive and gave the board a round of applause for its performance through the credit crunch and recession.

The bank defended Bob Diamond's controversial pay package, which has attracted increasing criticism after it emerged he could bag another 6m if the bank hits targets over the next three years.