British bank Barclays' investment banking division beat expectations in the first quarter, outshining the wider group's earnings drop and sending its shares to a six-week high.
Overall profits at Britain's third-largest bank were down 25% from a year ago.
This was due to the costs of new chief executive Antony Jenkins' plan to overhaul the lender after a series of scandals involving interest rate fixing, mis-selling of products and boardroom excess.
But investors shrugged off the dip, focusing instead on the investment bank, where earnings were up 11%, outperforming rivals Morgan Stanley and Goldman Sachs and accounting for most of Barclays' profit.
Over £0.5 billion sterling was spent in the first quarter of this year on Jenkins' "Project Transform", triggering a drop in adjusted pretax profit to £1.79 billion, just below a mean forecast of £1.85 billion from analysts.
The investment bank made a profit of £1.3 billion in the first quarter by keeping revenues steady and cutting costs. Income rose 1% to £3.5 billion, higher than the £3.3 billion expected by analysts.
Growth in equities and advisory offset a fall in fixed income, currencies and commodities.
Barclays said the good start to the year had continued into the second quarter across its businesses.
Rival Credit Suisse also posted steady first quarter revenues at its investment bank, raising expectations for UBS and Deutsche Bank.
Barclays is expected to spend nearly £3 billion on "Project Transform" over the next three years, including another £500m this year; axing 3,700 jobs, pruning the investment bank and reforming the bank's culture after a series of scandals.
The overhaul is expected to cut annual costs by £1.7 billion and Jenkins said he was confident of meeting that target.
"It's early days but we've put an enormous amount of activity in place and I'm pleased with the progress we've made," he said on a conference call.
Jenkins is attempting to distance the bank from the aggressive, high-risk culture championed by his predecessor Bob Diamond, who left in July after Barclays was fined $450m for rigging Libor interest rates.
Diamond's allies are leaving the bank, including Rich Ricci, the investment bank boss, and Tom Kalaris, head of the wealth management division.
The restructuring is expected to take five to ten years to filter through to the bottom line. Most of the costs incurred so far were in its European operations, where it has cut almost 2,000 jobs, and the investment bank, where it is axing 1,800.
Barclays said its core capital ratio was 11% at the end of March, and would have been 8.4% if new Basel III rules were fully in force.
Scrutiny on UK banks' balance sheets has intensified after the Bank of England last month said lenders needed another £25 billion of capital. But Barclays said today it was happy with its capital position.