Broker snap: Diamond's departure eases pressure on Barclays

Investec has reiterated its 'buy' recommendation and 240p target price for UK banking group Barclays, but said it is disappointed with the news that Chief Executive Officer Bob Diamond has resigned."We are disappointed by Bob's resignation this morning. That said, it is undeniable that the unrelenting political/media campaign had centred on Bob personally, and this was leading to a persistent misrepresentation of Barclays' position in relation to the multi-bank LIBOR investigations, and a clear distraction from the execution of Barclays' strategic repositioning," said analyst Ian Gordon.He said that the challenge now to the group's Chairman Marcus Agius is to "turn this situation to his advantage." Agius had previously announced that he would resign but revealed on Tuesday that he would stay on full-time to search for Diamond's successor."Whereas such an outcome was ultimately expected by many, in the light of Bob's robust response to the political/media firestorm over the past few days, the timing will surprise."Gordon said that if there is 'new news' to share, Diamond can no speak more freely at his Select Committee showtrial tomorrow "whether embarrassing to UK regulators or otherwise".The broker says that, given Diamond's departure, it expects the pressure on Barclays to ease slightly due to the increased recognition that the LIBOR investigation is a multi-bank issue "rather than Barclays-specific"."We expect Barclays's sharp share price underperformance to reverse as the market takes a more dispassionate look at the facts," Gordon said.Investors clearly saw Diamond's resignation as a welcome development, with shares trading 1.6% higher at 171.1p by 10:10 on Tuesday.BC