Barclays Results - how good?

We are not running a financial research business but every so often we are tempted to comment on a company result when we can use it to pinpoint some interesting development in our patch - banking, securities and money management. The one detail that caught our interest in the Barclays results was the fact that actual return on shareholder's equity seems to be below the 10 per cent mark. While this is a respectable number - is has been produced during the second part of the Credit Crunch at a time when the sizable Lehman USA acquisition had to be digested - it puts into perspective the fact that the banking giants produce headline catching numbers (total compensation paid out, profits earned) but this has to be seen in proper perspective. Making that kind of return with a lot of tailwind from financial markets and ultra-cheap central bank money is no superhuman feat. Any new costly regulation may well put downward pressure on banking profitability in the future.