Bob's (hell of a) job

8 September 2010 By George Hay Follow @gfhay

The new Barclays CEO is getting brickbats from politicians because he’s an investment banker who will be running a universal bank. Diamond certainly faces an operational challenge at Barclays’ retail division. But the leadership of this bank shouldn’t be decided by politics.

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UK Business Secretary Vince Cable said on Sept. 8 that Diamond's appointment highlights the task the government faces in trying to make the banking sector safer.

"We are worried about this combination of the casinos and traditional banking," Cable told BBC radio.

The Financial Times reported on Sept. 8 that Cable was "fuming" over Diamond's appointment. However, he did not publicly criticise the move. "It isn't the government's job to appoint the head of a private bank," he told the BBC.

A recovery in the fortunes of Barclays' corporate and retail bank could increase group fair value by 28 percent, according to Morgan Stanley research.

Assuming Barclays Capital is valued at one times book value, Barclays' other assets including UK retail, European corporate and retail and Barclaycard are worth just over 16 billion pounds, or 0.8 times the tangible equity held against them. Morgan Stanley estimates falling impairments could increase nonBarCap net income to 2.9 billion pounds by 2012, warranting a 1.4 times book valuation on a 10.5 percent cost of equity.

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