Barclays recently disclosed a 12% decrease in its first-quarter profit to £2.277 billion, attributing the decline to factors like UK mortgage pricing constraints, decreased trading revenue, and a scarcity of M&A fees. This financial result aligns with analysts' predictions averaging £2.2 billion for the January-March period, contrasting with the previous year's £2.6 billion profit.
In an effort to regain investor trust and address prolonged underperformance, Barclays is implementing a strategic transformation after a decade. The bank's plan involves bolstering its domestic banking sector, slashing costs by £2 billion, and elevating returns for shareholders, aiming to reinforce its universal banking business approach amidst past challenges with activist investors and leadership changes.
Despite a solid performance in equities, Barclays experienced a 7% revenue decline in its investment banking segment, falling short of expectations due to lower fixed income trading results and reduced merger advisory fees. Conversely, competitor Deutsche Bank reported a better-than-expected 10% rise in first-quarter profit, crediting the improvement to a recovery in fixed-income trading and deal-making earnings within its investment banking division. Additionally, Barclays announced the sale of an Italian retail mortgage book by its Irish unit, aimed at simplifying its portfolio exposures, with the deal expected to conclude in the second quarter, resulting in a £225 million pretax loss and maintaining neutral capital levels for the bank.