Barclays says that a slump in trading at its investment bank and sluggish mortgage demand has sent its first quarter pre-tax profits tumbling 12 percent to £2.3billion.

Despite 20 percent income growth at its private bank and wealth management arm and a 4% rise at its US consumer bank, Barclays’ revenues fell four percent to £6.9billion, driven by declines at its British retail and business banks, as well as its investment banking division.

Income from its UK retail bank fell seven percent due to increased competition for mortgages and deposits hitting its margins, while its investment banking division also suffered a seven percent decline, due to a lack of debt, currency and commodities deals, as well as lower fees from advising on mergers and acquisitions.

Barclays is selling a portfolio of Italian mortgages to investment group GoldenTree Asset Management for Eur400million (£343million) and chief executive C.S. Venkatakrishnan said that the proceeds will be reinvested in its UK consumer businesses.

He added that Barclays group operating costs had fallen three percent due to £200million of cost savings it found during the quarter, which offset the impact of inflation and spending on investment business growth.

Although Barclays’ profits were down, they were still ahead of City forecasts and as a result, Quilter Cheviot financials analyst Will Howlett described its first quarter results as “a solid start to the year”.