New Barclays boss sees profits fall by 9pc as investment arm dips

New chief executive Bob Diamond, above, is planning to sell assets, reshape the bank and slash costs to boost profitability.

The bank said on Wednesday that it was on track to achieve £500m of cost savings this year.

Barclays reported a pretax profit of £1.66bn for the January-March period, just below forecasts. Adjusted profit, stripping out movement in its own credit, was £2bn, up 10 per cent on the year.

Its Barclays Capital investment bank arm contributed underlying profit of £1.3bn, down 15 per cent on a year ago, as top-line income came in at £3.3bn, down from £3.8bn a year ago and just below expectations.

Income from its fixed income business fell 22 per cent from a bumper first quarter a year ago, offsetting an 11 per cent rise in equities and 10 per cent rise in advisory income.

The bank said trading in April had been in line with first quarter trends and it was content with current forecasts for 2011, which expect profits to rise to about £7bn.

Losses from bad loans dropped 39 per cent to £921m.

Barclays employs around 3,000 staff across Yorkshire.