Barclays Share News (BARC)

Barclays is to cut 3,000 jobs this year, blaming a "lacklustre" economic environment for hitting many of the bank's major markets. The bank has already cut 1,400 positions this year, according to chief executive Bob Diamond. The news follows an announcement by HSBC, yersterday, that it will cut 30,000 jobs across the world. Thus, and for the period under review, total income slipped to £15.24bn from £15.73bn, while pre-tax profits fell to £2.64bn from £3.94bn over the same period of the previous year. The fall in pre-tax profits, however, takes account of items such as the £1bn provision Barclays had to make to redress customers who were sold Payment Protection Insurance (PPI). Thus, and as the chief executive Bob Diamond explained, "We have delivered underlying profit before tax up 24% to £3.678bn and our underlying return on average shareholders' equity improved to 9.1% despite a lacklustre economic environment in many of our major markets which impacted income generation." "Our operating expenses have been tightly controlled while we have continued to invest in selected growth initiatives in a number of our businesses." Profit before tax in its retail banking arm improved 33% to £1.45bn and in investment banking 7% to £2.33bn. By geographical areas the Bank's income from the UK fell 3.2% to £6.28bn, in Europe by 21% to £2.23bn, in the Americas by 10% to £3.69bn, in Africa by another 5% to £2.5bn and in Asia by 18% to £637m.So how good or bad are the results and what were analysts looking for? Credit Suisse analysts writing last week, when they cut their 2011 and 2012 EPS forecasts for the bank, were of the opinion that, "The main reason for the revisions is the deterioration seen in the trading environment coupled with the fact that Credit Suisse does not see costs coming down quiet so quickly, resulting in an increase in the bank's cost to income ratio (CI) to levels above management's expectations (60-65%). More pressure on restructuring the business could be seen in the second half of 2011."Well, from today's release it turns out that the cost to income ratio, defined as operating expenses (before PPI payments) compared to total income net of insurance claims, works out to 65%, at the top end of management's expectations, but not above.As of 11:45AM shares of Barclays are trading up by 2.44% to 222.30p in London trading. RG/MM/AB