Good morning and thank you very much for joining us today. If I could just remind you to switch off telephones and Blackberry's that would be very helpful. Can I start by introducing my team, I am joined on stage by Robert Diamond, our President and for the first time for our results, Chris Lucas, our Group Finance Director and in the front row we have got Frits Seegers, Chief Executive of GRCB and Paul Idzik, the Group COO. Chris will take you through the results in detail and after him, Bob will give you our view of recent developments in the markets, as context for BarCap's results. Today is primarily about the interim results of the Barclays Group. So I wouldn't be talking much this morning about ABN AMRO, but I will make a few comments on the investments in Barclays by China Development Bank and to Temasek. Today's results provide a significant staging post in the strategic transformation of Barclays, you know that strategy well. It's to achieve faster growth through earnings diversification. The strategy can be implemented through organic and inorganic means, say for the last years it's mostly been by organic development. The planned merger with ABM AMRO is a different route to the same end, profit growth through earnings diversification. Either way the investment story for shareholders is strong. When I look at the subject of implementing our strategy and at our performance in the first half of 2007, what I would say is we have been keeping at it and that, we have been doing what we said we would. Three years ago at this presentation, I talked about our priorities. In particular, I said that there were certain things that we wanted to see in our performance over the short and medium-term. On…

Thanks John and good morning. You know from our announcement last week that we have delivered another strong set of results this half, building on the excellent performance of last year. In particular there has been outstanding profit growth in Barclays Capital, continued good progress in UK Retail, improved impairments in UK unsecured loans and cards, and another very strong performance from Absa in South Africa. Before I go in to more detail I'd like to run through the headline numbers. Profits fro the first half were £4.1 billion, which is if you look back exceeds profits for the whole year of 2003, showing how our recent growth has accelerated. We grew profits by 12% despite considerable currency headwinds, income grew 9% and so the cost as we continue to invest in the business to drive future revenues. Earnings per share were up 14%, return on equity was 26% and the economic profit grew 16%. We have increased the dividend... interim dividend by 10% to 11.5 pence. So divisional numbers are presented on the basis of the restatement we published in June. Starting the Global Retail and Commercial Banking, profits in UK banking grew 9%. Within that UK Retail continued to make very good progress with profits also up 9%. Income grew 5% to £2.2 billion adjusted for settlements on overdraft fees. There was a strong performance in current accounts and savings, when net interest income increased 12%. This was supported by product launches such as new instant access savings account day-to-day saver and high interest account savings build up. Net interest income in consumer lending declined on... as our more selective approach led to a reduction in outstanding balances. Our net shareholder mortgage lending for the first half compared with minus 1% for the same period last year and…

Thank you Chris. John has asked me to say a few words about Barclays Capital and the market conditions. You have heard from Chris that we had a record first half in Barclays Capital with a record in each of the first two quarters with PBT up overall 33%, and as you can see on this slide strong growth across all assets classes. Now I know you are interested in how we performed in July so, let me tell you. Despite the significant up tick in volatility in July and taking into account all the information and valuations we had a good July with both revenue and net income ahead of last year. The diversification that you will see on this slide really, really works. We have a very well diversified business in Barclays Capital in our rates business, our commodities business our foreign exchange business in emerging markets and in equities, all those businesses are experiencing increased client flows, increased investor interest and increased trading volumes. Let me give you an example, with our Fx business and the performance in July. During the very volatile markets and the demanding market environments, we have experienced daily Fx trading volumes of close to 100,000 clients transactions per day. This is double the daily average for June. In fact, if you look at our volumes in the first half of 2007 they were three times the volumes in the full year of 2005. Our capabilities and our scalable platform in foreign exchange have enabled us to continue growing, while many market counter parties are flagging capacity issues as a concern. Let me turn now to credit which is, I think the area you want to hear about. The market environment in credit has clearly become more challenging, the credit markets are experiencing…

A question for Bob predictably on the 15% to 20% over time growth in PBT on the back of much higher than that growth in the first half and so it was the starting point for your next period of 15% to 20% growth. So I think I asked this question last year and I will deliver it again, but does 33% in the first half 18 to your starting point or is that again not in a specific period but over the next several years, is that valid figure starting from today, particularly in the light of the strategic credit... I mean you point well taken on your balance sheet positions, your risk management but it was in same line through the strategy credit markets will have much lower revenue opportunities to speak over the next 12 to 18 months. Thanks.

You know it's interesting in this, we are always managing one or two product lines, when the volumes are down. So you get environments, that's why I put the slide of the environments in foreign exchange where currencies are very stable, has not a lot of volume. It's very high to predict. I think the difference here is we are pretty certain, that the volumes in sub-prime are going low for some period of time. So that looks clear. I think, importantly as you can see that's not a big share of our income in the path. So it's not going to have a huge impact. The 15% to 20% growth I talked about is about not in any one month period. It's very hard to say that, but in BarCap do we still see 15% to 20% opportunities for growth going forward? Absolutely.

James Invine here from Dresdner Kleinwort. Got a question on the retail banking, I see that you have extended the property gains and you are again going to reinvest that. I was just wandering how much more scope is there for further one-off investments. So if you could find another say billion of property gains would you be... how much of that, would you be able to put into the retail bank as one-off investment?

The decision around the properties and our activities there are driven predominantly by the rates that govern the property market. We found that one more recent transfers of properties we have been selling have been at yields of about 4.5%, which remains very good considering when you look at what's happed to the interest rates. So that's what's driven us to extend the property in certain respect. I think last year we mentioned that we are about a third of way through, so that gives you a flavor for how much is remaining. And I look at the investment in the retail bank as one of the things that we are able to flex really based on the overall income performance, the cost of running the business and the cost to income ratio targets that we have set for ourselves.

And I would just add the following that. We have said before one of the things we are shooting for here, as part of our UK banking cost to income ratio improvement is structurally lower cost to income ratio. If you look at the components of UK banking I mean, business banking is pretty competitive, 33% cost to income ratio improvement, half-on-half always been there about. The business has been off the place as you know. There has been the UK retail banking business and I've consciously put out that slide showing you the improvement from 65% to 56%. We don't yet no, and that's one of the reasons why we have been investing is because we can create significantly improved structural efficiency in that business. Operating size will be a very good example I can give you where I would say that if I looked back over the last 10 years, and our retail platform here in United Kingdom here it is too fragmented and there are significant efficiency opportunities. And some of the investment that we have we have liberated through the sale of properties has been directed to adjust that concentrating operational activity, synthesizing it into as much smaller number of sites and we are some way through that. We will make a decision later this year whether we should be setting a cost to income ratio goal for a further period in relation to UK retail banking and we will of course if we decide to do that, then we will give you information about that at the end of the year.

You are not to wishing to a preempt that when you have already seen a 9 percentage point improvement in the retail banks costing for money share. I mean another 9 percentage points over the next few years is that going to be too aggressive?

I know you are really keen to get, let me give you a forecast on it and I assure you that we have a current goal period on cost income ratio and it expires again at the end of this year. I don't want you think that at the expiry, if we capture the 8% over the last three years, if we intend to, that will then sort of relax in the pattern [ph]. I don't think that we will be where we need to be in UK retail banking cost to income ratio, by the end of this year. So in my mind I have the thought of the further challenge. I am not making any commitment to that today but we will inform you that at the time. But I am clear in saying that it is further to go.

Mohamed Afzal [ph] from Merrill Lynch. Two quick questions if I can, first of all the... international secondly on Absa. On both volume you are in profit. Obviously you have been investing very heavily in that business. Do you see this is now sort of coming around the J curve and now its moving seriously into profitability or do you see yourself sort of stepping up the investment in that business as you look to moving on to the next stage which will cap some of the profit growth opportunity leaving?

I think JP were very struck by the scale of the international card opportunity. I mean there is a handful of credit card companies around the world that have genuine scale and genuine competitiveness, and we do think that the scales that we have are well deployable around the play. Absolutely the best example of where we got a lot of survey charge in that side of the business as a result of deploying those skills into Absa. The biggest part of the J curve is the U.S. business and as you know, when we said when we bought the business, we're going to invest $100 million a year in marketing through a period. But we will come of the J curve in 2008. That looks like 150 million as you heard from Chris that's dollars. We will hit that $150 million in 2008. But the business is at quite different level of maturity. So if I look at a card market like Germany, well we've been in Germany for quite a long time. It's a profitable business. If I look at our joint venture in Scandinavia where I would we're starting there. We're partly way through the J curve in the United States. Our end game is to have an international card business of the same heft as our UK card business. And I think, when we set out on that journey in 2003, we said we thought it would take us 10 years to get there. I've mentioned to you before that our plan has been to accelerate the rate of investment in our proposition because we think we can get that earlier through time. I don't know whether helps and your question.

The second one just Absa, we have clearly very strong results coming through in this first half. The language you use on Absa's tendency [ph] which we put up. The picture struck a slightly more cautious tone looking forward and as long as you can maybe just amplify our comments where we should be bracing ourselves to --

Can you just give me the middle bit of what you said.

The risk tendency increased in Absa and the comments you make around might increased in risk tendency, seems to be just a more medium growth period as provisions normalize.

Yes, I mean, let me make a comment and then Chris might want to add and I think the way you should think about this is that in circumstances where there has been quite a significant increase in interest rates in South Africa. It will be surprising if some of the demand and we have seen fabulous demand on full particularly retail banking products and absolutely over the course of last year. Some of that gets choked off and you would expect to see the level of impairment rising and it is rising, not out of line with expectation but it is. I think its that, that we are saying. But meanwhile don't loose sight of the fact that we have got breadth of business advance and profit growth there and two very fast growing parts of the business all the Absa capital and then the Absa card. So we feel pretty confident about the medium term outlook and when we invested in that business, our view decades of growth here ahead of us. That's what we were backing. Nothing causes us to change that point view

HSBC Expedition you had given on the Barclays Capital but one area you haven't touched on is the CDO market and I know its the markets of the third largest issuer of CDAs in this half year, I know that sub- prime US mortgage assets have been increasing, a part of CDO issuance and as a leading originated one might expect that mezzanine and equity charge of as might have been CDA's payment within your balance sheet. I am wondering if you might be able to give me some indication and if my thesis is correct, some indication to the volumes or at least if not volumes how for counting purposes, those residual interests accreted are they not to market, are they available to sell securities as your losses were recognize when sales actually take place?

It's part of the secondary business and that's why I went kind of pains to say in July all the valuations, all the mark-to-markets are included in the July numbers. So the CDOs would form part of a secondary market which will form part of the credit spread VAR which as is I said even with the increased volatility the VAR in credit spread is below where it was a year ago.

Anything on the accounting part.

I have to say in accounting terms, Bob is actually right we do mark-to-market but in terms of some of these residuals, we have actually been incredibly conservative over the years since they have originated and we have not taken any upside into income. So actually in a mark-to-market we are just taking the downside.

It's Steven Anderson [ph]. Just a quick question on that net interesting count growth from the retail banks where the story is too hard. The liability size is also very impressive but the asset size looks like its down 5% or 10% year-on-year, can you just give us a bit flavor and detail us to the drivers of that?

Mix really.

And as to what we might see going forward. I mean obviously as mortgage asset versus... would you expect that stabilize and start making a positive contribution at some stage in the next 6 to 12 months?

Yes, I mean I think that the -- it's principle mix Steven. that has been if you look at the drivers of the asset margin, its been an intensely competitive period in the mortgage market we have been pricing at market, but the market has itself been quite intensive and there is been some downward pressure on the non-card consumer landing market but I wouldn't overstate that and as you rightly point out, if you look at the liability side then what we see there is a resilient margin or better. But that mix change I think is you should expect that mix change to be a feature of the future. We have raised our game and we need to do what we have raised our game significantly in mortgage competitiveness.

I think anything I would add and you said make contribution that the mortgage business even at the rate at which new business is being written, once you take of who makes significant [ph] impairment and the low economic capital charge makes a contribution than economic profit level.

Good morning, Sandy Tran from Gordon [ph]. Two related for Bob. The net trading income was up, obviously very nicely, £2.8 billion for the first half and 20%... 29% up year-on-year and what we double versus the second half. I would just like to get more flavor on really what is driving that. Is that mainly fair value mark-to-market gains behind that on net trading income and... that's first part of the question?

Yeah we have always been clear that the accounting convention of trading net interest fees in commissions. The fees in commissions can tell you something. When we look at the interest in the net trading together, quite frankly, as being our secondary business, the best measure you have on that is how is our VAR doing or value at risk. We don't... I think it's fair to say that we have less focus on proprietary trading in most of the other investment banks, we have said it consistently. It doesn't mean, we don't take risks. So it represents a lot more flows in the secondary market and in the growth in our business. If you will get a business like commodities for example, over a $1 billion in income in the first half, almost double what it was in the first half last year, clearly that's a lot more client volumes.

Maybe another way of asking that question is. I noticed in the balance sheet the derivatives held for trading purposes went up from roughly about $140 billion at the end of the year to $177 billion. Now, how much of that increase or how... what percentage of those derivatives held for trading purposes are on mark-to-model versus mark-to-market i.e. marked to your reference market observables versus mark to an actual market.

Well it depends on the underlying market, if there is a clearing underlying market, you clearly to that, if there is not you mark-to-model. These things aren't very complicated. We can take you through in detail how we do all that, if you want to spend some time. But I know from accounting [multiple speakers] looking at derivatives on their own can sometimes be misleading, it is quite often they are offsetting physical securities positions that are also mark-to-market.

There is also very large provisions held for all the reasons you would expect in derivates. So if you want to dig deeper it might be better to do offline. We will be happy to show you some of the other publicly available information.

The last part of that was just on risk tendency for BarCap was at 110 million for the first half... as of the end of the first half versus the 10 million charge in impairments. I mean should we really be looking at this tendency, or is it a bit out nowadays.

That would be an anti-religious statement, if I can tell you. No we believe in it, but then actually if you look at the risk tendency in BarCap it's been pretty stable over the costs of last two three years.

And we want to always be outperforming that, right. But it has been a fairly benign credit environment. Of the last three years, I don't to want to take too much credit here. The credit environment has been pretty good, one of the things I was saying and one of the reasons that we are confident that the supply demand balance and leverage finance will work out is we still feel that corporate credit is very strong. So that hasn't...in past cycles and leverage finance has been slowdown in 2002 for example. It might have been more around the underlying credits concerns. That's not the issue we have today. So we are quite confident and holding on to some of these positions until the supply demand balance comes back and as I said investors are demanding better space right now. It's a change in the last three or four years in the market. It is not necessarily bad for us, when this liquidity comes back and there is a bit more balance between buyers and sellers, it maybe just a little more spread for the dealers to --

Yes hi, I am Phil Richards [ph] got a question on the buyback program that you gave the details this morning. You are saying the same release of program will be executed by an independent third party broker acting independently and uninfluenced by Barclays. However I am not mistaken, Barclays have chosen is acting as your joint finance advisor, joint sponsor and joint broker, when you are paid for IBN, can you just reconcile the two, please?

Well I can reconcile the two, which is that we give clear instructions there is a framework within which the operation will be undertaken. We have set that out in very considerable detail for you in the announcement and you can imagine that the program will be carefully monitored by the regulators who have blessed it and they wouldn't have blessed it if they thought there was any scope for manipulation. I feel entirely comfortable with the fact that. What we have orchestrated here is something that is designed to fit for purpose. The purpose is to neutralize the impact of the unconditional investment we made by TTB and Temasek. I think that's the certain, I can have very much to what we have said. I mean what you can imagine; I mean what lies behind your question of course. This is the some scope for manipulation here. I hope you feel the sense of real reassurance about the way in which we structure the program and you can imagine that we will have to go through that in some detail with the FSA and SEC, but these are tough demanding regulators, they are absolutely satisfied with what we are doing. I mean I think there is not much more I can add to it.

[indiscernible] I am wondering if you can say something about the UK retail banking credit impairments. You indicated some changes and methodology for risk tendency and also provisioning. Can you give an indication of what's happening to the P&L charges as a result of that and also could you comment just a bit further on some of the trends you are seeing delinquencies. You have indicated quite a good trend in the first half of how far do you see that going? Could you split out the credit card and the other unsecured loan in there?

And starts by saying there are two pieces part of the businesses in Barclaycard and part of it is in the UK Retail Bank. In the UK Retail Bank the methodology changes are around with tendency and those models are always moving and in terms of changes we may try to input in all parameters. In terms though of the underlying trends the trend in the unsecured lending in the UK Retail Bank and Barclaycard is actually similar. There is improved fleet into delinquencies, there are better areas. I think in the UK cards business, we see that translating through into lower charge-offs and lower impairment charge. In the UK unsecured lending business, there is a same delinquency improvement; there is the same areas improvement, what we haven't yet seen in that business is a change or reduction in charge-off rates. I think in all terms we would say that the environment in which we operate for UK consumer remains tough, I think we called it challenge the last time when we were here, I think it remains that. And you will be seeing the impact of interest rates in terms of people's disposable income. So I think that would be much my summary. And what we have done I mentioned in my presentation as you heard that we think that the performance here just wanted to management action. So if I look at decline rates for example in Barclaycard in the first half of this year, they are operating at 55%. Its an indication of stringent financial criteria being directed it at new applications. But there are sort of fundamental position I think its very much as Chris has described and the way I have that in my head just in terms of the math sort of I have sort of rounded a bit, that if you look at particularly Barclaycard the impairment number in the first half of this year is £440 million rounded, if you look at it in the first half of last year, the equivalent number was 580 and then the second half 480, so you can see some significant step change. That's really what the principle fundamental reflection I think of what we are seeing. Next question if any?