Barclays sank into the red in the first quarter on massive exceptional charges, the British bank said today.

It was preparing to face a shareholder backlash over high executive pay tomorrow.

The UK bank suffered a net loss of £337m sterling in the three months to March, compared with a profit of £1.24 billion in the first quarter of 2011.

The results included a further provision of £300m to compensate clients who were mis-sold payment protection insurance in Britain.

It also had a huge accounting charge of £2.62 billion on the value of its outstanding debt.

Stripping out the compensation and other one-off costs, the bank reported a 22% rise in underlying pre-tax profits to £2.4 billion, aided by a buoyant investment banking division.

Barclays made no reference, however, of the growing furore surrounding the pay of chief executive Bob Diamond, with the issue of boardroom pay expected to come under very close scrutiny at the annual general meeting tomorrow.

Diamond last week offered to change the terms of his latest annual bonus worth £2.7 million in a bid to quell any shareholder rebellion. Diamond and group finance director Chris Lucas have agreed not to receive half of their all-shares bonus award for 2011 if certain performance targets were not met within three years.

Major Barclays investor Standard Life has welcomed the concession and said it would back the bank's remuneration report but other shareholders are still expected to voice their opposition to what they regard as excessive pay.

Simon Walker, director-general at the UK's Institute of Directors, warned yesterday that bonuses at Barclays were too high and that the bank should not be run "for the benefit of its top executives."

Barclays is not alone among global banks in feeling the heat from institutional shareholders who want to curb the pay and bonuses of top executives amid severe under-performance following the global financial crisis.

Across the Atlantic, shareholders in Citigroup last week refused to endorse a pay plan for chief executive Vikram Pandit and four other officials, dealing a blow to management that had failed to lift the bank's value in recent years.

Barclays said today that including exceptional charges, it made a pre-tax loss of £475m in the first quarter, compared with pre-tax profits of £1.65 billion last time around. Revenues sank 25% to £5.52 billion.

The bank, which survived the global financial crisis without taking a government bailout, added that investment bank revenues rallied 10% to £1.49 billion in the period. The lender also slashed its credit impairment charges by 16% to £778m.

Turning to the euro zone sovereign debt crisis, Barclays slashed its exposure to Greece, Ireland, Italy, Portugal and Spain by 16% to £6 billion during the first quarter. It said that exposure to Greece was now "minimal." Diamond said of the earnings provided "an encouraging start to the year.

"Our rock solid capital, funding and liquidity positions remain a source of competitive advantage and enabled us to fund a substantial proportion of our 2012 term funding requirements," he added.

The bank gave a cautious outlook, saying that the "continued challenging market conditions mean it is too early to establish the trend for the year".