WHAT a let-down. Barclays’ first-half numbers were like a huge picnic hamper that turns out to hold a couple of stale scotch eggs.

Investors quickly saw through the headline pre-tax profit of £3.9bn, which was 13 per cent ahead of consensus. The number was flattered by a strong decline in writedowns to £3bn, a large gain on own debt and smaller exceptionals such as a pension credit and the crystallisation of currency movements. The group’s reliance on BarCap is becoming a concern. Although it threw off a £3.4bn profit, the investment banking operation produced its worst performance for 18 months, with earnings down 15 per cent quarter-on-quarter.

Turning in a performance like this isn’t cheap, either. Group costs crept up 20 per cent year-on-year to £9.7bn and the bank admits its 9.8 per cent return on equity needs to be improved.

Barclays is still a rock-solid institution, and these are not the easiest of times for groups who have heavy exposure to investment banking.

There is room to outperform, but at 10 times 2011 earnings per share there are also cheaper banks.