Banking giant Barclays reports lower profits for the start of the year

However, the latest quarterly earnings figure came in above analysts’ expectations of £2.2bn.

Barclays said income from its UK operations fell 7 per cent year on year, with it facing more subdued mortgage lending amid weaker demand in the market.

It saw customer deposits dip by 2 per cent driven by lower customer account balances, which the bank said reflected broader consumer trends.

Barclays also revealed that income from its investment bank fell 7 per cent year on year, as a strong performance in the equities division was more than offset by lower activity in areas such as fixed income trading.

Barclays group chief executive CS Venkatakrishnan said the bank was “focused on disciplined execution” of its cost-saving plan.

It aims to save about £1bn by making the bank more efficient this year, and is targeting about £2bn worth of savings in total by 2026.

“We have now announced the sale of our performing Italian mortgage book and are investing in our higher returning UK consumer businesses, including through the expected completion of the Tesco Bank acquisition in the fourth quarter,” Mr Venkatakrishnan said.

Richard Hunter, Head of Markets at interactive investor, commented: “Barclays has shown stable rather than dynamic growth over the quarter, beating expectations on most measures but with some question marks over its US operations.

"For the group as a whole, the balance sheet remains in strong shape and the key metrics for the most part were progressive.”

He continued: “In terms of corporate activity, the group is looking to consolidate some of its more profitable markets. The Italian mortgage book is being sold at a loss of some £225m, while the acquisition of Tesco Bank is expected to complete by the end of the year, adding a further string to Barclays’ UK income bow.

"In terms of these numbers overall, Barclays UK was possibly the strongest performing unit in terms of improved contribution and the bank clearly has designs to capitalise on this strength.”

Mr Hunter added: "Further out, the group is anticipating larger shareholder returns which are likely to be skewed towards share buybacks, thus providing some share price support.”