Barclays (NYSE:BCS) released its first quarter results today, with two themes guiding the announcement. First, the investment side of the business, under the departing Rich Ricci, brought in almost three-quarters of the bank's pre-tax income . Second, restructuring costs put a 514-pound dent in the bottom line.
Overall, the bank managed a 839 million-pound profit after tax, up over 1.4 billion pounds from its near 600 million-pound loss this time last year. Its pre-tax position was down 25% to 1.8 billion pounds. The mixed weighed on investors, and the stock was down slightly in early U.S. trading.
Investment banking makes bank
The investment arm of Barclays got good reviews from all around. Earnings in the investment division were up 11%, as costs were pushed down. The distinction between costs and revenue certainly points to the new direction that the bank is taking. Over the quarter, it focused on increasing income by pushing those costs down -- revenues were flat.
That gives investors even more confidence that CEO Antony Jenkins is taking his reworking of the bank seriously. Under previous leaders, Barclays took on a reputation of wanting more at any cost. The departure of Ricci signals a break with that past, and a renewed focus on the cost cutting that Jenkins has championed in the press.
Cost cutting at Barclays
Those costs aren't disappearing without issue, though. The bank is going to spend an estimated 3 billion pounds over the coming three years, and is going to lose thousands of employees. Even with all that work done, it could take another five or more years for the savings to fully flow through to the bank's bottom line.
The costs are largely associated with shutting down underperforming divisions, though Jenkins is also going to shutter some bad press operations, as well. Earlier this year, the bank announced that it was closing its tax avoidance division, which was a income generator but a lightning rod for criticism.
Moving forward cautiously
For all its change of hearts and positive moves, Barclays still has a long way to go. To be realistic, even if it were to completely clean up its act -- inasmuch as a 140,000 employee company can -- it may still be tainted by the rest of the sector. Don't be fooled, right now Barclays is on the way to transformation, but it hasn't achieved it just yet.
Investors looking for a bank further down the line might want to look into Credit Suisse (NYSE:CS). The Swiss bank also reported today, but the news was weighted on the positive side. Revenue and income both increased, and the bank has recently taken on some wealth management opportunities while shedding riskier private equity operations. While the bank still has some troubles to overcome -- it was recently admonished for its high pay -- there's a lot to like at Credit Suisse these days.
Fool contributor Andrew Marder owns shares of Barclays. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.