Barclays" Diamond vows to try harder Taking the stage a year ago for his first results presentation as chief executive of Barclays, Bob Diamond could not have been clearer about the importance of driving up returns at the bank. "The difference in performance between winners and losers by this vital measure will be stark," he said as he promised to lift Barclays" return on equity from an "unacceptable" 6.8 per cent to 13 per cent by 2013. On Friday that statement came back to haunt him as he revealed that not only had the bank failed to make progress towards its ambitious target but that returns were even lower in 2011 than in 2010. Stripping out a number of one-off items, including £550m of costs for cleaning up its troubled Spanish operations and a £1bn charge for mis-sold loan insurance, return on equity - a key measure of profitability - slipped from 6.8 per cent to 6.6 per cent. Including those factors the fall was more pronounced - from 7.2 per cent to 5.8 per cent. "I am not satisfied with these returns," said Mr Diamond. I care about this a lot . . . it is important to shareholders. We have a lot more to do. While he insisted the 13 per cent goal remained intact, he could not say for sure when the bank would hit it given the tough economic headwinds and higher than expected regulatory costs. "If it wasn't for the external factors we could still do it - we'll make steady progress next year," he said. Mr Diamond brushed off the weaker than expected profitability, defending the performance of key businesses, particularly Barclays Capital, the investment banking arm he used to run. Pre-tax profit at BarCap fell by a third last year to £3bn while its return on equity slid from 13.5 per cent to 10.4 per cent. But the ever-optimistic Mr Diamond said: "Only one or two other investment banks were close to a double-digit return. I am very pleased with that. Analysts agreed BarCap had performed better than rivals in some areas - notably equity trading and investment banking. While income at its core FICC (fixed income, currency and commodities) division fell in every consecutive quarter last year and ended 2011 27 per cent lower than in 2010, it was still roughly in line with peers. Keen to deflect attention from the mounting row on pay - BarCap paid out £1.5bn in bonuses to its staff last year - Mr Diamond stressed that the investment bank had raised $1tn on capital markets in 2011, $400bn of which went to governments and public sector organisations. Elsewhere, the bank is facing persistent problems at two divisions - its corporate business and European retail arm - both of which were unprofitable in 2011. Barclays lost £2.5bn of retail deposits in Europe and shut down 20 per cent of its retail branches as it embarked on a costly clean up of its Spanish operations after the country's property collapse. The losses at its corporate business narrowed from £631m to £70m after impairment charges fell by a third. "We are working on fixing corporate banking," said Mr Diamond. Returns went from negative to positive and were strong in the UK but there is more to fix in Europe. Better news came from the core UK high-street business, where pre-tax profit, excluding a £400m charge for mis-selling payment protection insurance, jumped 60 per cent. Barclays increased its market share across each of its retail products - current accounts, mortgages and savings. A sharp fall in credit card defaults helped push pre-tax profit at Barclaycard above the £1bn mark for the first time after its portion of the PPI charge - £600m - was stripped out. The retail performance, together with strong growth at Barclays" African business and its wealth operations, was offset by the weaker divisions, meaning that total pre-tax profit fell by 3 per cent to £5.9bn. Income fell by 8 per cent to £28.5bn, excluding nearly £4bn of gains on its own credit and debt buy-backs. "It is BarCap's dominance . . . and the weak external environment that render the resilient performance across retail and business banking almost irrelevant," said Ian Gordon, an analyst at Investec.