Barclays is set to reduce its bonus pot for 2014 to less than £2 billion, down at least 16 per cent from its controversial payout in the previous year, Sky News reported.

Barclays, which has the largest investment bank of Britain’s lenders, will say bonuses fell below £2 billion for 2014 when it reports results on March 2, compared with £2.4 billion for 2013, Sky said, citing an insider.

Lloyds Banking Group and Royal Bank of Scotland will also both reduce their bonus pots for 2014 when they report next week, and payouts across the three banks will be about 15 per cent lower than for 2013, Sky said.

Barclays, Lloyds and RBS declined to comment.

Sky said the bonus figure for RBS could be about £500 million and Lloyds was likely to pay about £375 million; the combined £875 million would be down from about £975 million a year before, but could still spark a political row about pay at the two state-backed banks.

Barclays had faced a row with some shareholders a year ago after it increased bonuses despite a fall in profits.

The bank is also shrinking its investment bank and aims to cut 7,000 in the business, and cut about one-third of those last year.

Its bonus pot should also shrink due to role-based allowances it started paying staff last year, which shift the compensation structure so more is awarded in fixed rather than variable pay.