Barclays First Quarter Profits Down 25%

Barclays (LSE: BARC.L - news) has reported a 25% fall in pre-tax profits to £793m for the first quarter of 2016.

The bank, which is being overhauled under new boss Jes Staley, said its performance had been hit by widening losses in its "non-core" businesses, including loans to the education, social housing and local authority sectors.

But Mr Staley said the results - the first since a reorganisation of the group under ring-fencing rules - showed the lender making "good early progress" against a strategy update announced last month.

He said they showed "a core business performing well in a challenging environment".

Shares (Berlin: DI6.BE - news) rose 4% in early trading.

In the UK, underlying profits were 2% lower as revenues from personal banking fees fell and profit margins on mortgages - a market where competition is fierce - were squeezed.

The group's corporate and investment bank saw a 31% fall in earnings amid "challenging market conditions".

It (Other OTC: ITGL - news) follows a dismal clutch of first quarter earnings releases on Wall Street after the new year stock market turmoil caused a collapse in trading and fee income.

Mr Staley said moves to shed unprofitable divisions were cutting costs "which have a direct impact on our profitability today and mask the true performance of our strong core business".

On second quarter trading so far, Barclays said there had been little improvement for the investment banking business, with income down slightly further on a difficult first quarter, although the group added it was "too early" to comment on overall performance.

Barclays had already warned over first quarter trading, saying alongside its annual results in March that figures were set to be weaker than last year in the face of turbulent market conditions and a "particularly strong March in 2015".

The bank released the figures ahead of its annual general meeting.