[LONDON] Barclays Plc said profit fell 25 per cent in the first quarter as the businesses the firm is exiting posted a larger loss than a year earlier.
Reported pretax profit fell to £793 million (S$1.55 billion) from £1.06 billion a year ago, the London-based bank said in a filing Wednesday. That was lower than £846 million average estimate of nine estimates provided by the company.
"We promised to accelerate the pace of progress in reducing non-core so that our group performance converges with our core performance within a reasonable timeframe," chief executive officer Jes Staley said in the statement.
"As these deals complete, we are reducing risk-weighted assets and, crucially, eliminating costs which have a direct impact on our profitability today and mask the true performance of our strong core business.
Both the Barclays chairman and CEO have asked investors to endure short-term pain so they can boost returns. Barclays is looking to cut risk weighted assets at the bad bank, led by John Mahon and Harry Harrison, to about £20 billion by 2017.
Mr Staley, 59, is trying to convince investors of the long-term benefits of the maintaining the investment bank, even after it generated lower annual returns than Barclays's consumer and credit-card businesses.
The CEO has resisted calls to spin off the unit, and instead opted to cut the dividend for two years and sell down the bank's stake in its Africa business to boost capital.
Barclays had warned the quarter would feature lower revenue from the investment bank after a weak performance in March and US rivals fared as bad or worse as deals and trading ground to a halt amid economic jitters.
The stock has fallen 21 per cent this year, extending a two-year slump that's left the bank trading at about half the book value of its assets.
Chairman John McFarlane, 68, pledged in July to double the share price over the next three to four years.
This is Barclays's first results after under a new structure formed to comply with British ringfencing rules requiring the separation of consumer and investment-banking arms by 2019.
The ringfenced Barclays UK unit has about 70 billion of risk-weighted assets, while Barclays Corporate and International has £195 billion, including the investment bank, most of wealth management and the US and international cards businesses.