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LONDON (Alliance News) - Barclays PLC Tuesday reported a decline in first-quarter adjusted pretax profit as it was hurt by a slump in the performance of its investment bank, just two days before Chief Executive Antony Jenkins is due to present a strategic update revamping the underperforming division.
In a statement, the bank said it made a GBP1.69 billion adjusted pretax profit in the first three months of the year, 5.6% lower than the GBP1.79 billion reported for the corresponding quarter a year earlier.
Adjusted net operating income fell to GBP6.10 billion from GBP7.03 billion. One bright spot was evidence of Barclays' cost-cutting measures taking hold as operating expenses dropped to GBP4.44 billion from GBP5.30 billion a year earlier.
The adjusted figures, which strip out own credit, costs of provisions for mis-sold products, and goodwill impairment, were presented alongside an 18% increase in statutory pretax profit to GBP1.82 billion.
Last month Barclays warned of a small reduction in adjusted pretax profit, stating that its cost-cutting measures had partially offset a challenging quarter for its investment bank's fixed-income, currencies and commodities business.
The investment bank, which has been criticised for its high staff costs and declining profitability, reported a 41% decline in FICC income, which fell to GBP1.23 billion due to subdued client activity and changes in business mix as the division prepares for its strategic review.
Overall, the investment bank's pretax profit fell by almost half, to GBP668.0 million from GBP1.32 billion a year earlier.
The division, which came under criticism from shareholders at Barclays' annual general meeting last month, has been hit by increasingly stringent regulation aimed at ensuring losses can be covered in the event of a repeat of the financial crisis, as well as new limits on bonuses introduced by the EU.
Antony Jenkins said the significant decline in FICC income offset "strong momentum" across Barclays' retail, cards and corporate banking franchises.
"UK Retail, Barclaycard and Corporate together drove approximately half of the group's income this quarter and we remain well positioned to benefit from further improvements in the economic environment," Jenkins said in a statement.
At the open Tuesday, Barclays shares were down 2.9% at 251.00 pence.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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