Media comments following interim results

Barclays' investor relations
http://www.investorrelations.barclays.co.uk/BRC1/jsp/brccontrol?task=articleFWgroup&site=inv&value=1168&menu=394
Links to results announcement, presentation, webcast, conference call, etc.

Financial Times - Lex column
Needs subscription to read or paper FT
Is [Barclays] performing well or not? Certainly, investors have no idea. ... much of Barclays' underlying business seems to be holding up well. Yet ... impairments and potential problem loans are rising fast and will continue doing so as economic growth slows. Perhaps the biggest cause of the market's schizophrenia is that no one knows what regulators will do. ... if regulators wade in with new benchmarks, particularly regarding leverage, ... Barclays will need more capital.

Financial Times - Peter Thal Larsen and Jane Croft
http://www.ft.com/cms/s/0/b58e46dc-6446-11dd-af61-0000779fd18c.html?nclick_check=1
Barclays has offloaded troubled loans and securities worth £6.3bn during the past few months in a sign that investors have become more willing to buy debt assets affected by the credit crunch.
Deals were at prices consistent with valuations on Barclays’ balance sheet and did not require the bank to provide financing. Bob Diamond ... said ... “Even difficult assets – even mortgage assets – are moving to new buyers.” Barclays has also sold whole subprime-mortgage loans worth £828m, Alt-A mortgages worth £750m and commercial mortgages worth £700m.

Financial Times - Jane Croft (video)
http://www.ft.com/cms/84d2eba2-2a26-11dc-9208-000b5df10621.html
Some of the write downs that they have taken on things like the monoline exposures that they have got in the US seem quite light compared to rivals. They have taken average 14% whereas their competitors have taken 30%-60% write-downs.

Telegraph - Questor
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/08/cxquest108.xml
Varley reckons the worst of the financial crisis is over and many analysts say the shares are already priced for the looming economic downturn. The big question is whether the bank will have to take significantly more writedowns on its credit market portfolio. But so many big reputations have been staked on those assets performing that there is reason for confidence.

Revenues at Barclays Capital, the investment bank that has driven growth in recent years, are still growing once you strip out the writedowns, despite the worst market dislocation in a generation. Costs have been slashed by 30pc. Divisions such as foreign exchange, commodities and interest rates are resilient.
In the UK, retail banking improved profits by 7pc to £690m and saw only a modest increase in bad debts. Barclaycard profits jumped 30pc to £88m after the acquisition of Goldfish and the commercial bank avoided the severe provisions seen at rivals. The bad news was a worsening outlook in South Africa and Spain.

By maintaining an unchanged, cash dividend and producing solid results, Barclays has earned investors' faith - even if questions linger about the writedowns. Trading on 7.5 times 2008 earnings, buy.

Telegraph - Philip Aldrick
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/08/cnbarc108.xml
[John Varley] accepted that "the world ahead is not going to be an easy place", but said: "The moment of greatest potential stress is now behind us. That was the liquidity crunch..." ... he added: "The world of the next 12 months will be one of economic slowdown but not of widespread recession."

All Barclays' businesses were profitable, with the UK retail bank - which accounted for 26pc of net new UK mortgage lending in the half - improving profits by 7pc to £690m as bad debt charges rose just £11m to £288m. Impairments for the whole group climbed 40pc to £1.34bn, largely due to Spain and South Africa. At Barclays Capital, the investment bank, profits slumped 68pc to £524m after the writedowns.
The group is paying an unchanged 11.5p interim cash dividend on October 1, and plans to hold the final payout. The dividend will not be raised until twice covered by earnings.

Times - Patrick Hosking, Banking and Finance Editor
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4481739.ece
Mr Diamond argued that Barclays had successfully offloaded £6 billion of assets at prices at or close to their value in the books, giving the lie to critics who said that it had overvalued problem assets. “There's no better proof than that,” he said.
Barclays also defended its unusual policy of ignoring falls in the market prices of leveraged loans. Barclays argues that because it plans to hold its £5 billion of buyout loans to maturity and the borrowers are meeting all interest payments, there is no need for a markdown.


Reuters
http://www.reuters.com/article/innovationNews/idUSWLA775420080807
Diamond said there were good opportunities for BarCap to take market share during difficult market conditions, especially in the United States.
"We recognize how difficult the conditions are out there and the need to be cautious and to balance risk and reward, but we're not without focus on opportunities," he said. "The firms with the best franchises and business models can potentially see a pickup in business."
He said challenging market conditions are likely to remain this year and through 2009.
"We don't think this will spill into a deep, dark recession but we do think it's a cyclical event with a weaker, slower economy around the world," he said, suggesting the duration of the downturn will be unclear until the bottom of a U.S. housing market slump has been reached.

Reuters - Steve Slater
http://uk.reuters.com/article/businessNews/idUKWLA773520080807?feedType=nl&feedName=ukdailyinvestor
Bob Diamond ... said that reflected resilience in tough markets, but tough conditions were set to last. "Our operating hypothesis is that we're not going back to markets like 2005 and 2006, we're going to be in more challenging environments for the balance of 2008 and really throughout 2009,"

Against a difficult backdrop, Varley said core tier 1 capital would keep "a substantial margin" above its long-term target of 5.25 percent.

Barclays said it grabbed a 26 percent net share of the UK mortgage market in the first half, more than four times its traditional 6 percent share.

a tough backdrop created "significant opportunities" to take advantage, Varley said.

Citywire - Chris Marshall
http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=310814&re=3475&ea=91427
Barclays profits of £2.7 billion before tax, coming in slightly above analysts’ expectations, were dragged down by Barclays Capital, its investment banking division, which posted profits before tax of £524m, 68% down compared to the previous year. Bob Diamond ... said that it had been ‘the toughest environment in the investment banking business in 25 years’

... it has made progress in reducing US sub-prime and other credit market exposures in its investment management business. But it said that in Barclaycard UK impairment charges decreased and UK mortgage impairment charges remained very low as its mortgage book is conservatively positioned.


BBC news - Robert Peston http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/08/barclays_credit_and_credibilit.html
And there are three very striking features of these figures:
1) impairment charges, ignoring the credit-markets ghastliness, are up only a bit - and charges against loan losses in UK retail banking are only very slightly higher (which will make HBOS feel queasy);2) it's been ruthless in cutting costs, to prepare itself for leaner times;3) and it has captured a staggering 26% of the new mortgage lending market, up from just 6%.
That last statistic tells you quite how hobbled are most of the other British banks. Barclays is capturing huge share of a rapidly shrinking market because it has the wherewithal and confidence to play.
And lest you think it is taking foolish risks with house prices falling, the average value of these new mortgages is 51% of the value of the respective properties - so it'll make good money on all scenarios for our economy other than Armageddon.

Accountancy Age - Penny Sukhraj http://www.accountancyage.com/accountancyage/news/2223444/barclays-takes-8bn-writedown
'They have written off significantly more than they flagged in June and still the profit has met consensus. These are bad results, but in relative terms they are pretty decent.' said London-based analyst at MF Global Securities Ltd, Simon Maughan.