Costs and capital disappoint at Barclays

Barclays' cost pressures are especially noticeable. Strip-out £1.21bn associated with implementing the Transform restructuring programme and operating costs reached £18.7bn - more than the £18.5bn originally targeted for 2013 and well above 2015's target of £16.8bn. This significantly reflected extra litigation provisions, mainly for US mortgage-related business, and chief executive Anthony Jenkins insists that costs are actually "on track". Nonetheless, Barclays' adjusted cost-to-income ratio reached a painful 71 per cent; HSBC's (HSBA) last reported ratio for the nine months to September, in contrast, was 57 per cent.

But Barclays is adamant that slimming bonuses isn't the way to tackle costs: the bonus pot jumped 10 per cent to £2.38bn. Instead, Barclays will shed up to 12,000 jobs (7,000 in the UK). There's no target for branch closures, but Mr Jenkins admits they're "likely to accelerate" given the increased focus on mobile and internet banking - 33 UK branches closed in 2013.

Capital adequacy also failed to impress, despite October's £5.8bn rights issue. Barclays' Basel III core tier-one capital ratio fell from 9.6 per cent at end-September to 9.3 per cent - not so healthy compared to peers - although a 10.5 per cent ratio for 2015 is still being targeted. Meanwhile, investment banking, responsible for nearly half of profits, saw total income fall 9 per cent, reflecting market uncertainty as 'tapering' in the US takes hold.

Credit quality improved, but not dramatically. The bad debt charge did fall 8 per cent to £3.1bn, and remains tiny compared with the £430bn loan book, but impairments were higher at the UK retail arm, in Europe and at Barclaycard. Provisions for PPI and interest-rate product misselling, however, haven't increased since June.