2. Impairment better. The group impairment charge was lower than forecast at £3.1bn versus our forecast of £3.2bn. This was despite a £0.6bn charge in Barclays Corporate Spain as the group increased its provision coverage from 30% to 41% over the half-year. The offset was in the Barclays Capital loan portfolio where there was a very small net release;

4. But costs worse. At £9.7bn, group costs were up 20% y-o-y and about 2% higher than our estimates driven by sustained high levels of expense in Q2 relative to Q1. Indeed, Barclays Capital Q2 costs were £2.2bn versus Q1 at £2.1bn despite the revenue decline. This pushed the Barclays Capital Q2 cost to net income ratio (ex fair value gains) to 69% from 57% in Q1 2010. Costs outside Barclays Capital fell only slightly on Q1 and for H1 as a whole were up 12% on H1 2009.

While the valuation is relatively attractive at 1 times current TNAV, the shares continue to trade on over 9 times our 2011E EPS, a sizeable premium to other European investment banks. Furthermore, our estimates remain about 8% below consensus on 2011 PBT. Overall we rate Barclays Outperform but we think there is better value elsewhere.

When a winning box is bought, the GPS activates and leads an Omo team to the purchaser’s house in order to give them a prize – a video camera and a day at a Unilever-sponsored event.

Little new came out of the tour or the presentations to our minds. Therefore, we stand by what we put together in our longer piece; Ocado is interesting, distinctive and friendly to customers but it is just not worth anywhere near the £1bn+ management originally aspired to: the fact that the shares are lower since the visit also speaks volumes. We now look forward to the publication of results whereby we can start to firm up models and make more robust estimates as to company profits (eventually) and so valuation. We worry that management has a detached view of the world and unless they adjust their expectations, they will continue to scratch their heads as to why we and others think the stock is grossly overvalued.

LONDON, Aug 5 (Reuters) – The Bank of England kept interest
rates at a record-low 0.5 percent on Thursday and announced no
new quantitative easing purchases, a decision universally
expected in a Reuters poll of economists.
None of the 61 economists polled last week expected a change
in policy, and most did not expect a rise in interest rates
until April next year at the earliest.

I was out for drinks the other day with some of my former Kleinwort’s colleagues and stayed
on till late chatting with our former Japanese Strategy guru, Peter Tasker – who incidentally
writes another excellent article in today’s Financial Times Insight column, link. One of the
things we concluded was that investors are finally accepting that what is going on in the West
is indeed very similar to Japan a decade ago. For years my attempts to draw this parallel have
been met with hoots of derision – finally the penny is dropping