But with a sign of progress being made, and confidence about the outlook for the rest of the year, Barclays’ share price rose 3.9 per cent in early trading, reports CityAM.
Barclays’ first quarter pre-tax profit dropped 25 per cent to £793m, as total income net of insurance claims fell 11 per cent to £5.04bn, with non-core income dropping £464m to a net expense of £242m.
Core income decreased by three per cent to £5.3bn, including an own credit loss of £109m. Profit after tax for continuing operations increased three per cent to £545m.
Underlying profit before tax, which notable items, fell by 44 per cent to £902m as Barclays chalked up a loss in its non-core division of £815m, compared with a profit of £274m in the same period last year.
Total operating expenses reduced seven per cent to £3.8bn.
Barclays warned last month that its first quarter would be weaker than last year due to challenging market conditions and a “particularly strong” March 2015.
At the time new chief executive Jes Staley revealed a major restructure of the business, including a cut of more than half to dividends and plans to reduce its stake in Africa, after the bank posted a drop in full year profits. The move prompted the share price to plummet, forcing it to be suspended during the day, before closing down more than seven per cent.
Staley’s plan was to create two, main core divisions – Barclays UK and Barclays Corporate and International. Today he said the lender was making “good progress” on that strategy.
“The performance of the core today shows the potential power of the group once it is freed from the drag of non-core,” he noted.
Staley added: “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.
“We can see clear growth opportunities, such as in our Consumer, Cards and Payments business, in which we want to continue to invest. The performance of our Corporate and Investment Bank was relatively resilient in a tough quarter, but there is more we must do to improve returns, and we are focused on management actions to do so.
We continue to target cost reductions in the Group and we are on track to meet our 2016 guidance for the Core business of £12.8bn, and our longer-term target of a Group cost to income ratio under 60 per cent.”