Barclays unveiled a 25 per cent fall in adjusted pre-tax profit to 1.78bn pounds for the first quarter reflecting the costs of a major restructuring.
Chief Executive Antony Jenkins said his so-called 'Transform' strategy to make Barclays the go-to bank cost around £500m as the company worked to reduce its European retail branch network to focus on the mass-affluent segment.
Analysts at Investec had predicted an adjusted profit before tax of £1.6bn after expenses of the reorganisation.
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Excluding the costs of Transform and non-recurrence gains of £235m in relation to hedges of employee share awards during the first quarter of 2012, the group achieved a 6.0% rise in pre-tax profits.
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Statutory profit before tax jumped to £1.53bn, compared to a loss of £525m the year before, as a result of a significantly lower credit charge of £251m, down from £2.62bn.
Adjusted return on average shareholders' equity decreased to 7.6% from 12.4% with an improvement in statutory return on average shareholders' equity to 6.5%, compared to the previous year's negative 4.5%.
The bank's adjusted income fell 5.0% to £7.73bn, boosted by non-recurrence of gains of £235m in relation to hedges of employee share awards in the head office in the same quarter a year ago.
Investment bank income was up 1.0% at £3.46bn as increases in equities and prime services, and investment banking offset a decrease in fixed income, currency and commodities.
Credit impairment charges were down 10% to £706m, reflecting improvements in the investment bank and corporate banking and increases in Europe RBB and Africa RBB.
Customer net interest income for RBB, Barclaycard, corporate banking and wealth and investment management was broadly stable at £2.5bn, up from the prior year's £2.4bn.
Total net interest income came to £2.77bn, up from £2,72bn, while the growth in assets offset the net interest margin decline of four basis points to 179 basis points.
The firm said challenging economic conditions led to a higher impairment in the Europe and South Africa home loan portfolios.
During the period, the company reduced its headcount in Europe RBB by nearly 2,000, cut its distribution network by 30%, and culled 1,800 jobs in the corporate and investment bank.
Jenkins has been working to turn the business around following a LIBOR rigging scandal last year. He announced his strategy at the time of the annual results in February.
"We set out in our strategic review in February our path to become the 'go-to' bank for all our stakeholders. While there remains much to do to build a stronger and more resilient Barclays, we are completely focused on executing our Transform programme and are making good early progress," he said alongside the first quarter results.
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