'Unsatisfied' Diamond cuts Barclays' bonuses by 26%

Barclays chief Bob Diamond has said he is 'not satisfied' with the sharp decline in the bank's return on equity and has cut bonuses by 26%.

The British bank issued its worst profit report statement in three years, and its return on equity was a particular disappointment, falling to 5.8% from 7.2% in 2010.

'We are not satisfied with the return on equity we delivered in 2011 and are committed to delivering steady improvement moving forward,' Diamond (pictured) said.

Like 2011, 2012 will prove a challenge for Barclays due to the changing regulatory environment and the ongoing crisis in the eurozone, Diamond added.

Barclays' shares resilient

Despite this morning's gloomy trading update, investors in Barclays were not deterred. In volatile morning trade the bank's shares swung from being among the FTSE100's biggest losers into its leaderboard of fastest climbing shares.

At 8.26am Barclays shares traded at 233p, 038% up on Thursday's close.

Analysts also remained fairly upbeat on the stock, with Investec issuing a 'hold' recommendation on the bank.

Investec's Ian Gordon said that from a capital perspective Barclays looked 'fine'. adding that it had managed its liabilities over the year far better than most expected.

That is not to say the bank will not face headwinds, Gordon added, pointing out these are likely to be made worse by the bank's business mix.  Moreover, Gordon said Barclays has an  'inadequate' cost reduction programme in place.  'It is a very tough challenge ahead. We retain our hold and 240p  net asset value target price,' he continued.