Summary re Interim Rslts-Pt.2

Barclays PLC
3 August 2000


PART 2

Analysis of operating profit by business

Retail Financial Services

Retail Financial Services provides a broad range of financial services to
its customers worldwide.  Its purpose is to serve customers by understanding
their needs as individuals and by offering services and products that
anticipate and satisfy their requirements.

Retail Financial Services is organised into two major business groupings:
Retail Customers and Wealth Management.

                                  30.6.00   31.12.99   30.6.99
                                       £m         £m        £m
Net interest income                 1,306      1,249     1,222
Net fees and commissions              694        660       640
Income from long-term assurance        79         26        18
business*
Other operating income                 79         79        64
Total income *                      2,158      2,014     1,944
Total costs                       (1,135)    (1,161)   (1,165)
Provisions for bad and doubtful     (201)      (162)     (158)
debts
Operating profit*                     822        691       621

* Half year ended 30th June 1999 includes a £40m provision (half year ended
31st December 1999: £35m) for possible redress for personal pension
customers.

Retail Financial Services achieved a strong performance with a 32%, or
£201m, increase in operating profit to £822m.  Total income increased by 11%
to £2,158m.  Adjusted for the impact of the personal pension redress
provision of £40m during the half year ended 30th June 1999, operating
profit and total income rose by 24% and 9%, respectively.

Net interest income increased by 7%, to £1,306m (1999: £1,222m), primarily
as a result of growth in average UK consumer lending, average mortgage
lending (particularly in UK Premier Banking) and an increase in average UK
savings balances.  UK lending and deposit margins fell slightly.  The UK
lending margin reduced primarily as a result of pricing decisions in respect
of consumer lending products.  The deposit margin fell primarily as a result
of a change in mix.

Net fees and commissions grew by 8%, or £54m, to £694m.  This increase was
primarily within the Retail Customers business, which improved 9% to £391m.
Increased activity on current accounts and a significant increase in the
number of Additions accounts more than offset the absence of £11m of ATM
commissions received in the first half of 1999.  This followed the abolition
in the final quarter of last year of charges for customers use of non-
affiliated ATM machines.  In Wealth Management, there were good increases in
the contributions from Stockbrokers, Private Banking and Offshore Services.

Total customer funds, which include assets under management and on-balance
sheet deposits, grew by 3% to £122bn (31st December 1999: £118bn).  Assets
under management increased by 2% to £56bn (31st  December 1999: £55bn)
primarily attributable to net new business.  Loans to customers rose by 6%
to £35bn (31st December 1999: £33bn).

Total costs fell by 3% to £1,135m (1999: £1,165m), despite increases in
strategic investment expenditure of £14m and higher revenue related costs.
Total staff costs, excluding restructuring costs, were down 6% compared with
the first half of 1999.

                             
                                
Provisions rose by 27% to £201m (1999: £158m).  Adjusted for a one-off £11m
release of general provision, the underlying increase in provisions was 19%
which was mainly attributable to the volume growth in UK consumer lending.

Retail Customers

This business provides a wide range of services and products to personal and
small business customers throughout the United Kingdom and to personal and
corporate customers in parts of Africa.
                                         Half-year ended
                                  30.6.00   31.12.99   30.6.99
                                       £m        £m        £m
Net interest income                 1,003       971       945
Net fees and commissions              391       377       358
Income from long-term assurance        75        21        11
business *
Other operating income                 67        66        48
Total income *                      1,536     1,435     1,362
Total costs                         (782)     (794)     (794)
Provisions for bad and doubtful     (198)     (157)     (168)
debts
Operating profit *                    556       484       400

* Half year ended 30th June 1999 includes a £40m provision (half year ended
31st December 1999: £35m provision) for possible redress for personal
pension customers.

Operating profit in Retail Customers increased by 39%, or £156m, to £556m.
Adjusted for the impact of the provision for the personal pension redress of
£40m during the half year ended 30th June 1999, operating profit increased
by 26%.  Total income rose by 13% to £1,536m compared with the same period
in 1999.  Costs fell by 2% to £782m (1999: £794m), largely as a result of
centralisation of processing activity.  This was achieved despite the
additional costs associated with increased investment in on-line banking.

Provisions for bad and doubtful debts increased by 18% to £198m (1999:
£168m), mainly as a result of volume growth in UK consumer lending.

Total customer funds, which include assets under management and on-balance
sheet deposits, increased to £49bn (31st December 1999: £48bn). Loans to
customers grew slightly to £24bn (31st December 1999: £23bn).

UK Personal Customers

Average consumer lending balances grew by 8% to £6.4bn (1999: 13% to
£5.9bn).  The reduced growth rate compared with 1999 is a result of a
tightening in the risk assessment criteria reflecting the steady increase in
borrowing as a percentage of household income.

Average UK mortgage lending outstandings increased by 8% to £17.0bn (1999:
£15.7bn).  Gross new lending was £2.2bn (1999: £2.1bn) and market share was
broadly maintained at 3.7% (1999: 3.8%).  Margins in the first half of the
year remained stable.

Average UK savings balances grew by 6% to £20.5bn (1999: £19.4bn), in line
with market growth.  Margins reduced slightly as a result of continued
competition and changes in portfolio mix.

                          
Fees and commissions increased by 11% mainly due to additional current
account and overdraft lending activity and as a result of higher fee income
from the Additions accounts.  The number of Additions account holders
increased by 10% to 958,000 (31st December 1999: 871,000).  Income from
payment protection underwriting benefited in line with improved volumes of
consumer lending, overdraft, mortgages and credit card lending.

Progress continued in long term savings and investment activities with
annual premium income arising on sales of unit trusts, managed portfolios
and pension products remaining strong at £97m (1999: £91m).

Demand for on-line banking continued to grow rapidly with the number of
registered personal and small business internet banking users now 1,110,000
(31st December 1999: 500,000).  Around 1 in 8 personal current account
customers are now registered for on-line banking.

The number of customers registered for telephone banking continued to grow,
increasing by 11% to 1,109,000 (31st December 1999: 1,000,000).

UK Small Business

Total income grew 11% during the first half of 2000 as a result of 12%
growth in average deposits, and growth in average lending balances of 18%.
Fees and commissions remained at similar levels despite increased activity,
reflecting continued pressure on money transmission tariffs.

Total costs fell by 1% compared with the first half of 1999, primarily as a
result of efficiency benefits from the continued centralisation of
activities.

Internet initiatives within Small Business included the launch of a joint e-
commerce development with Freeserve to provide a small business portal in
the UK for services, information and advice needed to start up and run a
successful small business.  The number of Small Business customers
registered for on-line banking continued to grow, up 73% to 116,000 (31st
December 1999: 67,000).

Africa

Operating profit rose by 41%, or £17m, to £58m reflecting strong
performances in Ghana and Mauritius and despite difficult economic
conditions in Zimbabwe and Kenya.  Income across Africa rose by 28% to
£142m.  Overall costs increased £6m to £73m.



Wealth Management

Wealth Management serves affluent and high net worth clients globally with
relationship based services and bespoke products, particularly in the areas
of banking, asset management and long-term financial planning.  Wealth
Management includes Private Banking, Offshore Services, UK Premier Banking,
Stockbrokers, continental European retail businesses and the Caribbean.

                                        Half-year ended
                                  30.6.00   31.12.99   30.6.99
                                       £m        £m        £m
Net interest income                   303       278       277
Net fees and commissions              303       283       282
Income from long-term assurance         4         5         7
business
Other operating income                 12        13        16
Total income                          622       579       582
Total costs                         (353)     (367)     (371)
Provisions for bad and doubtful       (3)       (5)        10
debts
Operating profit                      266       207       221

Operating profit in Wealth Management rose by 20%, or £45m, (27% adjusting
for the sale of Merck Finck in the first half of 1999) to £266m driven by
strong growth across the businesses.  Total income grew by 7%, or £40m, to
£622m (10% adjusting for the sale of Merck Finck) reflecting particularly
good income growth in Stockbrokers, up 15% to £76m, Private Banking by 9% to
£83m and Offshore Services up 13% to £127m.

Total costs fell by 5% (2% adjusting for the sale of Merck Finck) to £353m.

Total customer funds, which include assets under management and on balance
sheet deposits, grew by 4% to £73bn (31st December 1999: £70bn).  Loans to
customers grew by 10% to £11bn (31st December 1999: £10bn).

UK Premier Banking operating profit grew by 20% to £42m benefiting from
increased customer volumes, with customer loans and mortgages increasing 60%
and 43% respectively, compared with the first half of 1999.

Offshore Services operating profit rose 14% to £84m, with overall average
funds under management growing by 3% to £13bn (31st December 1999: £12.6bn).
Asset and liability margins were maintained.

Operating profit in the continental European retail businesses benefited
from the continued application of sophisticated customer knowledge and
behaviour tools.  Operating profit, excluding the contribution from Merck
Finck, was up 38% to £44m (1999: £32m).  Fees and commissions also grew as a
result of a good performance in French mutual fund and unit linked insurance
sales, together with higher stock exchange commissions and increased growth
in mortgage products.

On-line banking facilities are also available to European customers, with
over 17,000 customers in France, Spain and Portugal now registered to bank
on-line.  On-line share dealing facilities are available to customers in
France and Spain.  On-line banking in Offshore Services (with full multi-
currency functionality) was launched in June.

                       

Operating profit for the Caribbean business increased by 50% to £36m, aided
by the strong offshore market and increased lending volumes in the domestic
business, up 24% compared with the first half of 1999.

Private Banking operating profit rose 38% to £29m, reflecting increased
clients' funds which rose 4% to £25.6bn (31st December 1999: £24.7bn).

Stockbrokers' operating profit grew by 52% to £32m as a result of good
growth in investment management income and increased dealing activity.
Average daily deal volumes increased to 8,900 in the first half of this year
(1999: 6,400).  Around 30% of retail private customer deals are now executed
across the internet.

                     

Barclaycard

Barclaycard is the largest credit card business in Europe with a presence in
the United Kingdom, Germany, France and Spain.  It offers a full range of
credit card services to individual customers, together with card payment
facilities to retailers and other businesses.  Barclaycard was the first UK
credit card to offer internet account services and continues to expand its e-
commerce operations.

                                      Half-year ended
                                  30.6.00   31.12.99   30.6.99
                                       £m        £m        £m
Net interest income                   269       247       241
Net fees and commissions              254       249       231
Total income                          523       496       472
Total costs                         (218)     (202)     (195)
Provisions for bad and doubtful     (110)      (88)      (82)
debts
Operating profit                      195       206       195

Operating profit at £195m was at the same level as the first half of 1999.

Net interest income rose 12% to £269m benefiting from a 17% increase in
average UK extended credit balances to £5.2bn, with Barclaycard's share of
the UK credit card market being maintained.  The proportion of interest
earning balances to non-interest earning balances was maintained at more
than 70%.  The interest margin has reduced slightly as a result of a rise in
funding costs and the introduction of a competitive range of customer rates.
During the first half of this year customer recruitment rose 39% to 388,000
(1999: 280,000) and self closure attrition rates reduced by 17%.

Fees and commissions increased 10% to £254m (1999: £231m) as a result of a
12% growth in transaction volumes compared to the first half of 1999.  This
was slightly offset by continued pressure on merchant acquisition fees.

Barclaycard's international business in Germany, France and Spain continued
to grow with average outstanding balances increasing by 59% over the first
half of last year.  The number of cards in issue overseas increased 10% to
1.1 million (31st December 1999: 1.0 million).

Total costs in Barclaycard increased by 12%, or £23m, to £218m mainly as a
result of increased strategic investment costs of £33m (1999: £16m)
including the development of information management capabilities,
international expansion and e-commerce businesses.  Staff costs in the UK
were held at the same level as last year.

Barclaycard continues to build its technology capability.  It was the first
UK credit card company to post products on the web.  Over 235,000 customers
are registered to use the Barclaycard website for on-line account servicing,
growing at a rate of 5,000 per week.  It also has 80,000 active retailers,
with 4,000 already providing shopping facilities on-line.

Provisions for bad and doubtful debts increased by 34%, to £110m (1999:
£82m).  This was primarily attributable to the increased volumes of new
business within UK extended credit balances and relatively stronger growth
in international interest earning balances.

                      

Corporate Banking

Corporate Banking provides relationship banking to the Group's middle
market, large corporate and institutional customers.  Customers are served
by a network of 1,200 specialist relationship managers across the United
Kingdom who provide access to an extensive range of products.  Corporate
Banking also offers its customers access to business centres in the rest of
Europe, the United States and the Middle East.  In addition, an office in
Miami provides finance and correspondent banking services to the Group's
customers in Latin America.

Corporate Banking's close working relationships with Barclays Capital
ensures that large corporate and institutional customers have access to the
capital markets and to specialist investment banking products which
complement Corporate Banking's product and service range.

Corporate Banking has a strong competitive position in the United Kingdom,
where around a quarter of middle market companies bank with Barclays.

                                      Half-year ended
                                  30.6.00   31.12.99   30.6.99
                                       £m        £m        £m
Net interest income                   658       642       610
Net fees and commissions              366       362       328
Other operating income                (5)      (17)         5
Total income                        1,019       987       943
Total costs                         (434)     (443)     (420)
Provisions for bad and doubtful      (44)      (55)      (65)
debts
Operating profit                      541       489       458

Corporate Banking operating profit increased by 18%, or £83m, to £541m.

Net interest income rose by 8% to £658m.  Average customer lending balances
increased by 11% to £46bn.  This reflected strong growth in average UK
lending and continued growth in average international business volumes which
increased by 17% to £8bn.

High levels of origination have continued within large corporate banking in
the United Kingdom largely as a result of acquisition linked activity.  UK
middle market lending volumes grew strongly, resulting from the
implementation of the new sales strategy, providing relationship managers
with a more focused sales management approach, together with mobile working
technology.  Lending growth has been concentrated towards larger and higher
quality customers and as a result the overall quality of the portfolio has
improved.  The Sales Financing product range, which includes factoring and
confidential invoice discounting, has seen particularly rapid growth in
total volumes, up 63% to £3.1bn, as a result of an ongoing investment
programme to develop this business.

Growth in customer lending within the rest of Europe has been predominantly
in the established operations in Germany and France, although the new
representative office in the Netherlands has also made encouraging progress.
The Middle East also saw a good flow of new business.  Exposure to Latin
America remains carefully managed and fell 16% compared with the average for
the first half of 1999.

Overall lending margins have eased slightly.  UK lending margins continued
to narrow, reflecting the concentration of growth in the larger and higher
quality customer segment.  Overseas margins fell as stability returned to
Latin American markets.


Average deposit volumes increased by 5% to £36bn albeit at a slower rate
than 1999, reflecting a contraction in corporate liquidity.  Growth has been
stronger in higher margin branch based deposits compared to lower margin
Treasury deposits.  As a result the overall deposit margin has been
maintained, despite competitive pressure in some products and lower margins
on non-interest bearing current accounts.

Net fees and commissions increased by 12% to £366m (1999: £328m).  Lending
related fees rose strongly reflecting a higher volume of arrangement fees in
respect of on and off-balance sheet financing products.  Money transmission
income remained at a similar level as a result of continued pricing
pressure.  Strong growth in electronic products has resulted in over 30% of
UK corporate customers being registered for these services.  Foreign
exchange related income increased as a result of volume growth.

Other operating income fell as a result of increased credit provisions in
the Group's Brazilian associate, Banco Barclays e Galicia SA.  There was no
contribution in the first half of 2000 (1999: £3m) from Cairo Barclays SAE,
which became a subsidiary from June 1999.

Costs increased by £14m, or 3%, to £434m as a result of higher investment in
the business and the impact of the consolidation of Cairo Barclays, which
added £5m to costs in the first half of 2000.  Strategic investment costs
increased to £41m (1999: £16m).  This increase was in respect of the new
business to business e-commerce initiative Barclays B2B.com, the UK's first
secure 'purchase-to-payment' e-procurement system and continued investment
to enhance Corporate Banking's middle market franchise.

Costs (excluding strategic investment costs and the impact of the
consolidation of Cairo Barclays) fell by 4% with staff costs down compared
to the first half of 1999 reflecting continuing efficiency programmes.

The net provisions charge remained at a relatively low level of £44m (1999:
£65m).  Releases and recoveries were £37m (1999: £39m).



Barclays Capital

Barclays Capital conducts the Group's international investment banking
business.  The business focuses on areas where it has a competitive
advantage and which are integral to the Group.  It serves as the Group's
principal point of access to the wholesale markets and also deals in these
markets with governments, supranational organisations, corporates, banks,
insurance companies and other institutional investors.

The activities of Barclays Capital are grouped into two principal areas:
Rates which includes sales, trading and research relating to government
bonds, money markets, foreign exchange, commodities, and their related
derivative instruments and Credit which includes origination, sales, trading
and research relating to loans, securitised assets, corporate bonds and
their related derivative instruments and private equity investment and
equity derivatives.

Barclays Capital is an important component of the overall Group, providing a
variety of complementary services and products to all of the Group's
businesses and customers.  It also provides a counterbalance to
disintermediation of the traditional corporate lending businesses.

Barclays Capital, with its leading European loan business and strong client
franchise, is well positioned to benefit from the continued strong growth in
the European capital markets.  In addition, the globalisation of investment
flows creates significant opportunities for investment banks like Barclays
Capital which have global capability for providing financing solutions to
companies.
                                      Half-year ended
                                  30.6.00   31.12.99   30.6.99
                                       £m        £m        £m
Net interest income                   222       199       201
Dealing profits                       415       233       316
Net fees and commissions              105        80        83
Other operating income                 23        19        21
Total income                          765       531       621
Total costs                         (509)     (382)     (423)
Provisions for bad and doubtful      (38)      (13)      (23)
debts
Operating profit                      218       136       175

Operating profit increased by 25% to £218m (1999: £175m) reflecting strong
performances in both the Rates businesses and the Credit businesses despite
a continued challenging trading environment.

Dealing profits rose by 31% to £415m (1999: £316m).  The Rates businesses
continued to perform strongly with good contributions from interest rate
derivatives and government bonds.  In the Credit businesses, there was
strong growth in equity derivatives from increased customer related
activities.  Dealing profits in the second half of 1999 were adversely
affected by widening credit spreads which continued to affect secondary
corporate bonds in the first half of 2000.  The average daily value at risk
level during the period was £17.9m (1999: £13.0m).

Net interest income increased 10% to £222m (1999: £201m) as a result of good
performances from structured capital markets and the money markets business.


Net fees and commissions rose by £22m to £105m (1999: £83m) reflecting the
increased number and size of transactions in the Credit businesses, in
particular from large acquisition related loans.  These included high
profile transactions such as Vodafone AirTouch PLC's purchase of Mannesmann
AG, France Telecom's purchase of Orange PLC, Pacific Century CyberWork
Limited's bid for Cable and Wireless HKT in Asia and Nisource Inc's
acquisition of Columbia Energy Group in the United States.

Other operating income increased by £2m to £23m and includes a profit
arising from further distributions from Long Term Capital Portfolio, which
have now resulted in the full repayment of the original amount invested.
Realisations in the Private Equity business continued to make a good
contribution.

Provisions for bad and doubtful debts increased to £38m and were mainly in
respect of overseas exposures.

Costs rose by 20% to £509m (1999: £423m), reflecting a higher level of
performance-related pay in line with improved profitability.  Other costs
remained at a similar level to the first half of 1999.  This was achieved
while continuing to hire a broad range of staff as part of the strategic
expansion of Barclays Capital's European franchise and despite increased
investment in e-commerce.

Through e-commerce, Barclays Capital supplies electronic research,
analytical, trading and reporting systems to clients in a range of products
including exchange traded futures, commercial paper and foreign exchange.
This e-enablement capability has made a range of initiatives possible, such
as working with the Charles Schwab Corporation to develop automated foreign
exchange facilities which would enable retail investors to buy and sell
multi-currency securities, lead managing the first e-bond issue for the
European Investment Bank and being a founding provider of fixed income
credit products through SWX, an electronic exchange for Swiss retail
clients.


Barclays Global Investors

Barclays Global Investors (BGI) is the largest institutional asset manager
in the world counting some of the world's most sophisticated investing
institutions amongst its 1,600 clients.  BGI offers quantitative active and
indexed asset management services for clients in thirty four countries from
offices located in seven countries around the world.  BGI is also a leading
global lender of securities to qualified financial institutions who borrow
securities on a fully collateralised basis as a financing tool and to
support customer activities.
                                      Half-year ended
                                  30.6.00   31.12.99   30.6.99
                                       £m        £m        £m
Net fees and commissions              196       166       152
Net interest income                     4         3         3
Total income                          200       169       155
Total costs                         (167)     (154)     (127)
Operating profit                       33        15        28

Operating profit has increased by 18% to £33m (1999: £28m).

Fees and commissions increased 29% to £196m (1999: £152m) as a result of
management fees from new business growth in assets under management and
increased sales of higher margin products in advanced active and exchange
traded funds.  New business volumes were particularly strong in the United
States, United Kingdom and Japan, with good growth in Canada and Australia.
Over a third of assets under management are now sourced outside the US.  The
introduction of securities lending in Japan last year and the volume growth
in the US also contributed to the revenue improvements.

Total assets under management grew to £529bn from £486bn at 31st December
1999; £23bn of the increase is attributable to net new business and £20bn is
attributable to market and exchange rate translation movements.  Assets
under management consist of £418bn of indexed funds and £111bn under
quantitative active management.

Costs rose by £40m to £167m partly reflecting continued investment in the
development of the business and increased staff costs.  Staff costs
increased by 28% mainly as a result of an increase in staff by 200 to 1,900
during the first half of 2000 to support the growth in the business and also
increased performance related payments.

In the first half of 2000, BGI launched 28 new ishares (exchange traded
funds) in the US, bringing the total number now listed to 45 and over £5bn
of funds under management globally.  The iFTSE 100, the UK's first exchange
traded fund was launched in April.  BGI's UK Defined Contribution business
grew rapidly, experiencing a 36% and 39% increase in client numbers and
assets under management to 137 and £1.3bn respectively, at 30th June 2000.

                     
                                      Half-year ended
Administrative expenses - staff   30.6.00   31.12.99   30.6.99
costs
                                       £m        £m        £m
Salaries and accrued incentive      1,283     1,229     1,238
payments
Social security costs                  85        96        94
Pension costs                          21        20        18
Post-retirement health care             7         9         6
Other staff costs                     210        35       312
                                    1,606     1,389     1,668
Included above:                                              
Restructuring charge                   92      (55)       247
                                                             
Excluding restructuring charge      1,514     1,444     1,421
                                                             
Number of staff at period end:*                              
Retail Financial Services**        44,200    46,100    47,800
Barclaycard                         3,700     3,600     3,800
Corporate Banking                  10,200    11,400    11,900
Barclays Capital                    4,000     4,000     4,200
Barclays Global Investors           1,900     1,700     1,700
Other operations                    5,800     7,100     7,600
Head office functions                 500       400       400
Group total world wide             70,300    74,300    77,400
of which United Kingdom            52,300    55,700    57,800

*Staff numbers do not include temporary and agency staff of 4,300 (31st
 December 1999: 3,600; 30th June 1999: 3,900) whose costs are included in
 staff costs.
**Retail Financial Services include staff who represent a shared resource
 with Corporate Banking, but exclude 1,100 regulated salesforce and field
 sales managers (31st December 1999: 1,000, 30th June 1999: 1,000) and
 1,200 administrative staff (31st December 1999: 1,300, 30th June 1999:
 1,300) whose costs are borne within the long-term assurance fund.


Staff costs rose by 7% excluding restructuring costs of £92m (1999: £247m).
The increase in salaries and accrued incentive payments reflects higher
performance related payments in Barclays Capital and BGI, and an increase in
the provisional allocation to employee profit sharing.  Excluding
performance related payments and profit sharing allocations, staff costs
were slightly lower than the first half of 1999, with savings from job
reductions offsetting the impact of pay awards.

In Retail Financial Services staff costs, excluding restructuring costs,
reduced by 6%.  In Corporate Banking staff costs, before restructuring costs
and the consolidation of Cairo Barclays, fell compared with the first half
of 1999.  For both Retail Financial Services and Corporate Banking savings
from job reductions more than offset the impact of the annual pay award to
UK staff.

Pension costs remained at a similar level to 1999 with the contribution to
the Group's main UK scheme continuing at nil.

The £55m restructuring credit in the second half of 1999 arose from a
reduction in the original charge made at 30th June 1999 as targeted job
reductions were achieved at lower than expected cost.


In the first half of 2000, overall staff numbers reduced by 4,000 from
74,300 to 70,300.  The reduction of staff numbers within Corporate Banking
includes 700 as a result of the sale of Dial.  Staff number reductions in
the first half of 2000 associated with the £92m restructuring charge were
some 1,000.  In addition, a further 1,400 of the reduction related to staff
where the notice process was underway at 31st December 1999.  Staff numbers
also reduced as a result of normal staff turnover and by 300 as a result of
outsourcing.  In addition to the 1,000 staff who have already left the Group
the £92m restructuring charge relates to a further 3,200 staff.
                            

Value Based Management

Barclays is introducing Value Based Management (VBM), the principles of
which are designed to align management decision taking at all levels of the
Group with the interests of its shareholders.  The VBM framework is designed
to identify and reward performance that maximises shareholder return.  The
basic principle is to establish a robust financial framework that provides a
consistent evaluation of the risk and return characteristics that can be
applied to all business activities.  VBM will also have a significant impact
on key processes such as strategy development, management decision taking
and performance-linked incentivisation.

Economic profit

VBM is based on the concept of economic profit - the post-tax attributable
profit generated by a business over and above the cost of capital.  A
business or activity that generates a positive economic profit creates value
for our shareholders, whereas a business that generates a negative economic
profit destroys value.  To avoid the problems of short-term optimisation of
business performance that have sometimes been associated with VBM
frameworks, the strategy and performance of business will be assessed on a
multi-year basis by discounting future projected economic profits.

Economic profit is defined as profit after tax and minority interests less a
charge for the cost of average shareholders' funds.  This is calculated
using a capital asset pricing model.  The assumptions made include estimates
of the future equity market risk premium of 4.5% and the relative risk of
Barclays shares compared to the FTSE, measured by beta.  A forward looking
beta of 1.2 has been used.  The Group's target is to double economic profit
every four years.

                                      Half-year ended
                                   30.6.00   31.12.99   30.6.99
                                        £m        £m        £m
Profit after tax and minority        1,320     1,063       834
interests
                                                              
Average shareholders' funds          8,924     8,307     8,265
Post tax cost of equity                11%       11%       11%
Cost of average shareholders'        (491)     (456)     (455)
funds
Economic profit                        829       607       379

Profit after tax and minority interests excludes the charge for the write-
back of goodwill on disposals of £138m in the first half of 1999.

Economic profit as defined above but risk adjusted (replacing credit risk
provisions with risk tendency (see page 37) was £802m (half year to 31st
December 1999: £556m, half year to 30th June 1999: £355m).

Economic capital

Economic capital, which is distinct from regulatory capital, is a management
tool that estimates risk on the basis of the volatility of earnings around
their predicted level and therefore their contribution to overall Group
risk.  The higher the volatility, and hence risk, the more capital is
required.  Capital is calculated for each business based on its contribution
to the overall risk of the Group.  The major factor affecting profit
volatility is credit risk.  The calculation also reflects market risk and
business and operational risk.

The calculation of economic capital is an integral part of the work to
introduce the VBM principles and is being further developed as part of that
process.