Barclays Investment Bank Drags On Profits

Barclays has reported a 5% fall in adjusted pre-tax profits for its first quarter, dragged down by a 28% drop in income at its investment bank.

It confirmed profits of almost £1.7bn as its Fixed Income, Currencies and Commodities (FICC) operation, contained within the investment bank, delivered a 41% fall in income on the same period last year.

The bank blamed the decline on subdued client activity and changes to its business mix - reforms that are due to be announced on Thursday when the results of a strategic review are made public.

The review of the investment operation could include thousands of job losses and the creation of an internal 'bad bank'.

However, in its results statement on Tuesday the bank said its retail, cards and corporate banking franchises all generated higher returns in the last quarter while operating expenses fell to their lowest level since 2009.

Group chief executive Antony Jenkins said "a continued strong momentum" in those areas was offset by a "significant decline" in FICC income.

"As previously announced, I will update the market on Barclays strategy to deliver improved and sustainable returns and growth for our shareholders on May 8", he said.

"This plan will address issues underlying the performance challenges we have recently experienced, including positioning the investment bank for the new operating and regulatory environment." 

The bank's share price fell almost 4% when the FTSE 100 opened for business on Tuesday morning.

Barclays did not make any new provisions for compensating customers who were mis-sold payment protection insurance (PPI) - saying its pot of money set aside for redress stood at £689m and overall complaint volumes had fallen.

Earlier this year, Barclays announced a 32% fall in annual profits to £5.2bn but stoked controversy by raising its bonus pool by 10% to £2.38bn.

The bank - like many of its UK competitors - has argued it has had to pay to retain staff that are crucial to future shareholder value.

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