[ by Melanie Gretchen ]

Barclays reported a 25% drop in Q1 pre-tax profits, as the firm set aside significant funds earmarked for an overhaul of operations.  For 2013, Q1 earnings were £1.8 billion ($2.7 billion), a drop from £2.4 billion for the same period one year earlier.  Earlier this year, Barclays was even as the bank announced earlier this year it would cut 3,800 job as part of the closure of several business units.

Investment Banking Strong.   The British bank enjoyed strong earnings in its investment banking, wealth management and credit card divisions.  Nevertheless, the bank incurred charges in the first quarter of £514 million ($337 million) connected with its restructuring plans and expected to spend an additional £500 million ($328 million) this year as part of the overhaul.

"While there remains much to do to build a stronger and more resilient Barclays, we are completely focused on executing our transform program and are making good early progress." -- Antony Jenkins, Barclays CEO, in a statement.

Since Barclays paid $453 million to settle allegations by U.S. and U.K.authorities that it manipulated Libor, the bank has already undergone significant change.  Former CEO Robert Diamond Jr. and investment bank head Rich Ricci resigned, and newly minted CEO Mr. Jenkins gave up his 2012 bonus, estimated at $4.3 million (though he kept awarded deferred share options worth around $8 million last month).

Going forward the bank will buy back up to $1 billion of its debt in a complex deal to improve its funding reserves.  In addition, the bank sold sold $1 billion of contingent capital, a financial instrument that offers investors a yearly return, but is wiped out if the bank’s core Tier 1 ratio falls below a certain limit.  

Nevertheless, it's fair the bank's not out of the woods.  Barclays has been required to hand over billions of dollars after it inappropriately sold complex financial products to consumers, and American and British regulators continue to eye the bank over payments connected to a group of Qatari investors that provided the bank a cash infusion during the financial crisis.

For further details, go to [Dealbook, 4/24/13].