*

Q1 profit of 2.3 bln pounds, in line with forecasts

*

Investment bank income slides 7% on FICC, advisory woes

*

Bank trying to deliver on strategy revamp announced in

February

*

Shares rise 2.8%

(Adds shares in paragraph 4, details on new structure and

investment bank performance in paragraphs 6-8, 11-15)

By Lawrence White and Sinead Cruise

LONDON, April 25 (Reuters) - Barclays ( JJCTF ) reported

a 12% fall in first quarter profit on Thursday, as a squeeze on

UK mortgage pricing, lower income from trading and a drought of

M&A fees showed the difficulties it will face in delivering its

first strategic revamp in a decade.

The British bank reported pretax profit for the

January-March period of 2.3 billion pounds ($2.84 billion), down

from 2.6 billion pounds a year ago and narrowly above analysts'

forecasts for 2.2 billion.

Barclays ( JJCTF ) is bidding to restore investor faith in its

universal banking business model, after years of share price

underperformance, clashes with activists over the role of its

investment bank, and management turnover.

Its shares were trading 2.8% up at 0806 GMT compared with a

0.6% rise in the FTSE 100 index.

The British bank said in a long-awaited strategy review on

Feb. 20 it would invest in its high-returning domestic banking

business, as well as axing 2 billion pounds of costs and ramping

up payouts to shareholders.

The results update on Thursday was the first under the

lender's new structure, reorganised into five operating

divisions instead of three in an attempt to provide clearer

disclosure on performance and management accountability.

The lender now reports results for Barclays UK, Barclays UK

Corporate Bank, Private Bank and Wealth Management, Investment

Bank, and U.S. Consumer Bank.

All five business divisions reported lower returns on

tangible equity (ROTE) than their first-quarter 2023

comparisons, with the UK Corporate Bank the laggard of the set,

posting ROTE of 15.2% from 21.7% a year ago.

Income in the UK bank division, which specialises in

consumer and home loans, also fell 7%, amid increased

competition in the mortgage market and as savers moved money to

higher-returning products.

INVESTMENT BANK STRUGGLES

Total investment bank income also fell 7%, just shy of

expectations, and the unit's overall ROTE of 12% was 2.4%

percentage points lower than the first quarter of 2023. Still,

the performance of the under-pressure unit was in line with its

long-term target.

Barclays ( JJCTF ) said income in its traditionally strong Fixed

Income, Currencies and Commodities (FICC) unit fell 21% as

clients' trading slowed and against a strong year-ago

comparison.

Investment banking advisory fees slid 30% as it failed to

capture merger advisory fees.

Equities revenue rose 25%, meanwhile, as the bank performed

strongly in both derivatives and cash equities trading.

Barclays' ( JJCTF ) investment bank performance overall lagged rivals

on Wall Street, where the top five players on average saw FICC

trading revenues fall 3%, equities rise 6%, and investment

banking fees rise 25%, according to research from Jefferies.

Rival Deutsche Bank on Thursday posted a

better-than-expected 10% increase in first-quarter profit,

citing a bounce back in fixed-income trading and deal-making

revenue at its investment banking division.

The British bank also said it had on Wednesday announced its

Irish unit, which houses much of its European business, would

sell an Italian retail mortgage book in line with aims to

simplify its exposures.

The deal will conclude in the second quarter of this year,

generate a pretax loss of around 225 million pounds and be

neutral to the bank's capital levels, Barclays ( JJCTF ) said.

($1 = 0.8017 pounds)

(Reporting By Lawrence White and Sinead Cruise; Editing by

Emelia Sithole-Matarise)