Barclays’ profit down on major restructuring

 
Tim Wallace
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BARCLAYS’ profits fell in the first quarter as the lender pushed through an expensive restructuring programme to shut down weak units and improve its tarnished reputation, its financial results showed yesterday.

But its investment bank made gains and accounts for most of the profits.

Pre-tax profits for the lender came in at £1.79bn for the three-month period, down on the adjusted £2.4bn in the first quarter of 2012.

Losses increased in the European retail and business banking arm, up from £72m a year ago to £462m in the quarter as the bank continued to reduce its footprint in the countries.

And the Transform programme racked up costs of £514m in the quarter. It forecasts another £500m of related costs this year. The scheme will cut 2,000 Europe jobs, and 1,800 in investment and corporate arms.

Other areas recorded healthy growth – investment banking profits rose 11.3 per cent to £1.3bn, and Barclaycard brought in £363m, up 4.6 per cent.

Return on equity dipped to an adjusted 7.6 per cent while the core tier one capital ratio rose to 11 per cent. The bank’s shares fell 1.26 per cent.