Despite just a 1% drop in profits, Barclays CEO John Varley has decided not to pay bonuses. That’ll please both the UK public and the markets.

The move from the bank that refused a public handout, securing investment from Middle East sources will wrong-foot competitors. And at a time when confidence in the banking system is at an all-time low.

I can imagine some very red faces around the other City boardrooms this morning…

A better than expected performance, a more responsible attitude

Barclays assets have been hit no less had than other banks - it had to write-down £8.1 billion for the year 2008 - but Britain’s third largest bank was still able to show a profit attributable to shareholders of £4.38 billion ($6.40 billion).

That’s just a 1% drop from 2007, where it returned £4.42 billion.

Overall, profit before tax was 14% down at £6.1 billion from £7.1 billion in 2007. And its not just the figures that are good. The bank brought forward the announcement, showing that within the City, someone still knows how to tell people what they want to hear.

The no-bonus move reflects general incentive payments across the banking group, which John Varley describes as “significantly lower” than last year. Bonus payments are expecting to resume later this year, however.

Will the other UK banks be so upbeat?

Barclays announcement came ahead of time, the better news pushing up its share price. This first quarter year sees a whole raft of banks reporting. RBS, expected to declare losses of around £28.0 billion ($41.3 billion) reports on 26th February with Lloyds Banking Group a day later. 2nd March sees HSBC stepping up to the plate.

A better plan for the future?

Barclays has often been criticised in the past for bad publicity decisions - the disastrous advertising campaign featuring Sir Anthony Hopkins extolling the virtues of “a big bank” while the branch in the actor’s home time closed was an embarrassment.

Barclays seems to suffer from an identity crisis. Having tried to present itself in so many ways, it seems to struggle to find the right marketing mix. A fact reflected by the number of marketing directors exiting No 1, Churchill Place in rapid succession of late.

Could today’s announcement mean that a new strategy of public responsibility has been introduced in Canary Wharf?