Barclays profit falls: Barclays announced a 12 per cent decline in first-quarter profit on Thursday, highlighting challenges such as UK mortgage pricing pressures, reduced trading income, and a lack of M&A activity. The British banking giant disclosed a pretax profit of €2.277 billion ($2.84 billion) for the January-March period, down from €2.6 billion a year earlier, aligning closely with analysts' expectations.

With its first overhaul in a decade underway, Barclays aims to rebuild investor confidence in its universal banking model, addressing years of underperformance in share value, internal disputes over the role of its investment arm, and leadership changes.

In its strategic review unveiled on February 20, Barclays outlined plans to bolster its lucrative domestic banking operations while slashing €2 billion in costs and increasing shareholder dividends.

However, challenges persist, notably a 7 per cent decline in total income from its investment bank, falling short of market forecasts. Although equities performed well, weaker fixed-income trading and merger advisory fees weighed down overall revenues.

In contrast, rival Deutsche Bank reported a better-than-expected 10 per cent profit increase for the quarter, citing a rebound in fixed-income trading and deal-making within its investment banking unit.

Barclays also announced the sale of an Italian retail mortgage portfolio through its Irish subsidiary, part of a broader effort to streamline operations. This transaction, expected to close in the second quarter, will result in a pretax loss of approximately €225 million but is anticipated to have a neutral impact on the bank's capital reserves.

(with Reuters inputs)