Barclays results

Barclays Bank reports a reduction in profits this morning following a fall off in investment banking income and costs associated with the bank's Transform programme.

Adjusted profit before tax reduced to just under £5bn but PBT improved to £2.85bn as a result of better credit experience.

Anthony Jenkins has introduced the Transform programme which seeks to run the bank for the benefit of a wider group of stakeholders with a balanced scorecard approach to management and  metrics including crucially pay.

This is a brave move and to be applauded with a return on cost of capital targeted at 9.5% by 2016, but with current experience a couple of percentage points away from the medium term goal. The Transform  programme is expected to cost £1.2bn as the reliance on investment banking activities, and tax driven gains are wound down.

On the bright side, no new provisions for PPI mis-selling were announced and the bank is clearly making progress in moving to a simpler and more sustainable model. Core tier 1 capital improved to over 11% so this is increasingly a stronger more stable institution.Barclays results

Libor and interest rate swap claims are yet to be finally put to bed but news this week of issues around currency trading and the unresolved investigation into Middle East investment in the bank  will be a key focus for the Barclays management team in the coming months.

Solid, steady, progress, not adjectives we would have associated with the Diamond era, ironically  back in the news due to the reversal on the $700m Black Diamond Hedge Fund claim which has gone against Barclays.

What Anthony Jenkins clearly understands is that Stellar returns are no good if they don't stick. In an uncertain world stability is back in fashion, and there seems to be little doubt that Jenkins has steadied the ship. Solid progress is good.

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