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LONDON (Alliance News) - Barclays PLC on Wednesday said its first-quarter results showed a core business in rude health even as the bank saw a 25% drop in pretax profit.
Pretax profit fell to GBP793 million in the three months ended March 31, Barclays said in a statement, down from GBP1.06 billion the corresponding quarter a year earlier, with income net of insurance claims down 11% to GBP5.04 billion and credit impairment charges up 15% to GBP443 million.
Operating expenses rose by 22% to GBP3.75 billion, while litigation and conduct costs dropped to GBP78 million from GBP1.04 billion, mainly because the corresponding quarter a year earlier included an GBP800 million provision over authorities' investigations and litigation relating to manipulation of the foreign exchange market.
It was the first set of results since Chief Executive Jes Staley outlined in March a vision of Barclays as a transatlantic consumer, corporate and investment bank anchored in London and New York.
"It is the first set of results as a transatlantic consumer, corporate and investment bank operating under our new configuration of Barclays UK and Barclays Corporate & International, and they show a core business performing well in a challenging environment," Staley said.
Its corporate and investment bank was "relatively resilient" in what Staley called a "tough" quarter, with "more we must do" to improve returns.
The income run-rate within the corporate and investment bank in April has been "slightly down" on what was seen in the first quarter of 2016, according to Finance Director Tushar Morzaria, who said it is too early to make any "specific comment" on overall second-quarter performance.
Morzaria warned that Barclays is "cautious" as the United Kingdom approaches its June 23 referendum on whether to remain a member of the European Union or leave.
Barclays also said it's in talks to sell its French retail banking operations to financial services private equity firm AnaCap Financial Partners, including its network of 74 branches, life insurance business, and wealth and investment management operations. Barclays will continue to operate corporate and investment banking in France.
"This transaction, once completed, would effectively finish our exit from Continental European branch-based retail banking," Staley said.
Shares in Barclays were up 3.8% at 180.70 pence on Wednesday morning.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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