Adjusted operating expenses were up 7% to £5.3bn, principally reflecting costs of its £514m ‘Transform’ programme, which was announced in February.
This will see staff cuts of around 2,000 in its distribution network and 1,800 staff leaving in the corporate and investment bank.
Earlier this month it was confirmed that head of investment banking Rich Ricci and colleague Tom Kalaris would be leaving as part of the review.
Chief executive Antony Jenkins reasserted Barclays stated to goal to become the “Go-To” bank.
"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.
Immediate priorities
“Strategic cost management is a critical factor in delivering our commitments. We have recognised around £500m of ‘costs to achieve Transform’ in the first quarter, reflecting our immediate priorities to reduce our European retail branch network in order to focus on the mass-affluent segment and on re-positioning our equities and investment banking operations in Asia and Europe.
“As indicated in the strategic review, we expect to recognise a further £500m of costs to achieve Transform in 2013.”
He added that for Q1 adjusted pre-tax profit was £1.8bn driven by good momentum across the businesses, particularly in the investment bank, Barclaycard and wealth and investment management.
Barclays is rebuilding its reputation following the well-publicised Libor scandal which saw the departure of former chief executive Bob Diamond.
Herculean task
“Barclays has a Herculean task in reinventing itself whilst at the same time continuing to grow the business,” commented Richard Hunter, head of equities at Hargreaves Lansdown.
“The update shows that the challenge is being faced head on, with a cultural shift in train and a more general restructuring being actively pursued. This comes, quite literally, at a cost, and the headline numbers have suffered as a result.
“In addition, there are the perennial concerns within the industry, such as regulatory overhang and censure, increasing capital requirements, a sluggish global economy and crimped returns on capital. However, quite apart from the changes it is making, Barclays continues to consolidate the universal banking model which should bolster prospects.”
The Government’s reshaping of the banking sector has been hit by some embarrassing setbacks. Click here to find out why.
