Terry Murden: Mixed bag but retail arm shines for Diamond as Barclays delivers

While Barclays’ key investment banking arm has seen profits dip, overall the bank performed well

AS THE former head of Barclays investment banking business, Bob Diamond will wince at the squeeze at BarCap which has been the biggest contributor to the bank’s profits. However, the chief executive will be comforted by overall group performance for the first nine months that has set down a challenging marker to his rivals.

The markets seemed encouraged by progress and a rise in pre-tax profits that helped push the shares to the top of the FTSE 100 at yesterday’s open. The shares are already up 45 per cent in five weeks, fuelled by the largely benign outcome of the eurozone talks that left British banks free of the need to raise further capital. Shares fell back with the market but remain on a number of buy lists.

Retail banking, including the Barclaycard credit card business, were the bright spots in yesterday’s statement while attention was focused on the impact of the eurozone crisis. Exposure to European sovereign debt was reduced by 31 per cent, though it remains a significant millstone as the bulk of what remains on the balance sheet is in Spain and Italy, two of the countries on the eurozone critical list.

Diamond views the outlook as tough and he’ll continue trimming staff after axing 3,500 over the year and 2,100 since June in an attempt to drive £1 billion out of costs. He wouldn’t be drawn on staff numbers but the clear message is that 2012 will be testing for employees.

Rebuilding the investment banking business will be challenging but Diamond, like his fellow bankers, will have one eye permanently on the eurozone and its chances of improving its short- to medium-term prospects.

With little growth on the horizon across the region and the possibility of it slumping into another recession, cost-cutting and consolidating the solid UK retail business look like the safer routes to improving the year end numbers.

Planned chaos is not helping our city centres to recover

AT LAST the country’s transport and town planning people are noticing the mess our town and city centres are in. Professor Iain Docherty of Glasgow university and urban designer Brian Evans, a partner at Gillespies, say the country’s main thoroughfares are little more than poorly-maintained, traffic-choked alleys.

It’s a been a regular grouch in this column that retailers struggling with the downturn in consumer spending aren’t being helped by the way in which our cities have become victims of neglect that in some cases could be described as nothing short of municipal vandalism.

Broken pavements, patched up roads, the clutter of mesmerising road signs, temporary traffic lights, unsightly concrete bollards, twisted metal fencing, endless rows of traffic cones… then there’s the parking nightmare, the puzzling array of restrictions, bamboozling one-way systems.

Edinburgh is arguably the worst – and all of the above is on top of the road closures, diversions and barriers that make the capital look like it is trying to defend itself from invasion.

Is there any wonder shoppers are fleeing town centres for the comforts of the out-of-town shopping malls? Just what are we paying our transport and city planning people to inflict all this damage?

It’s time the retailers got together with the chambers of commerce to demand some immediate remedial work and de-cluttering that will once again make town and city centres attractive destinations for shoppers and those who work there.

MF failure hits Wall Street and boss Corzine’s political hopes

THE collapse of US brokerage MF Global has been described as a “baby Lehman”, not so earth-shatteringly momentous, but damaging enough, not least because of the losses on bets taken on eurozone debt at a time of great fragility in the market. The knock-on effects are yet to be felt, but hundreds of jobs in the City of London are at risk.

MF insists it has been prudent in its dealings while others claim that Jon Corzine, the former Goldman Sachs boss now heading the firm, was acting irresponsibly. In his drive for profits he appears only to have forced MF into a fourth quarterly loss after trading in debt from troubled eurozone nations.

The result is that the firm is in bankruptcy protection and is arguably the most prominent US casualty yet from the eurozone crisis.

Is Corzine a victim of circumstances or has he over-stretched his ambition in trying to turn MF into a mini-Goldman? Critics point to Goldman Sachs’ major trading losses under his watch in 1994 and say he’s chosen the wrong time to place such large bets when everyone else was running away from European debt.

Corzine had been tipped as a possible treasury secretary in the Obama government, perhaps replacing Timothy Geithner.

While he retains many supporters on Wall Street, it is widely held that Corzine’s business and political careers are unlikely to recover from this latest setback.