He can't walk on water but Diamond is cutting it

So why did the shares jump 5% back to a level last seen last summer?

Ian Gordon, analyst at Investec, turns to the Bible for his explanation: "But the men marvelled, saying, What manner of man is this, that even the winds and the sea obey him!" (Matthew 8:27).

Bob Diamond, I am certain, cannot walk on water. But he's done a pretty impressive job in the 14 months he has been in charge of Barclays and today is no exception.

Admitting the 13% return-on-equity target will be missed is actually no great surprise to the City.

The economy is in a far worse state now than when he set it and the volatile earnings which come from investment banking were always going be sharply lower in the final quarter of last year.

The slight miss on the profit forecast is nothing when Barclays is able to say today that trading conditions had improved and BarCap has enjoyed an encouraging start to this year.

Investors are also impressed at the way Barclays has taken the axe to bonuses.

Profits are down 3%, bonuses across the group down 26% at £2.6 billion and dividends for 2012 were up 24% at £660 million.

What big investors have been calling for is for bonuses to more accurately track the kinds of returns they are receiving.

Barclays' bonuses are still nearly £2 billion more than its dividend but both are moving in the right direction.

For the wider UK economy the good news is that Barclays increased its lending by 3% last year against a market-wide reduction of 5%.

It beat its Project Merlin targets by 13%. It is even paying less bank levy than expected because its balance is safer than the Treasury had guessed.

Take your bonus, Bob.