Barclays first-quarter profit hit by restructuring charge

 

British bank Barclays said first-quarter profit fell a quarter from a year ago, as a hefty bill for the cost of a restructuring plan by its new chief executive offset a solid performance by its investment bank.

 

Adjusted pretax profit for the three months through March dropped to 1.79 billion pounds from 2.4 billion a year ago, just below a mean forecast of 1.85 billion from analysts polled by the company.

 

Profits were dented by a 514 million pound charge to cover costs associated with "Project Transform", CEO Antony Jenkins' plan to axe 3,700 jobs, prune the investment bank and reform the bank's culture after a series of scandals.

 

The bank said it expects another 500 million pounds of charges related to the restructuring this year.

 

Jenkins is attempting to distance Britain's third-biggest bank from the aggressive, high-risk culture championed by his predecessor Bob Diamond, who left in July after Barclays was fined $450 million for rigging Libor interest rates.

 

Most of the costs incurred so far were in its European operations, where it has cut almost 2,000 jobs, and the investment bank, where it is axing 1,800.

 

The investment bank made a profit of 1.3 billion pounds in the first quarter, up 11 % on the year and accounting for almost three-quarters of group profit.

 

Investment bank income rose 1 % on the year to 3.5 billion pounds, higher than the 3.3 billion expected by analysts, as growth in equities and advisory income offset a fall in fixed income, currency and commodities income.

 

The bank said the good start to the year had continued into the second quarter across its businesses.