British bank Barclays said it will spend £1 billion to shield its domestic retail customers from riskier parts of its operations.
This prompted the bank to raise its guidance on costs for next year and cut its returns target.
The bank also set aside £290m to compensate customers mis-sold foreign exchange products as it reported a 10% drop in quarterly profit.
Barclays detailed for the first time its expected costs to implement the so-called "ring-fencing" of its UK retail bank, required by law to be in place by 2019.
The bank said it will spend about £400m next year to implement the ring-fence, and as a result lifted its guidance for core costs to £14.9 billion from £14.5 billion.
It also cut its 2016 return on equity target for its core business to 11% from 12%.
The lender said it will spend about £100m on ring-fencing plans this year, and the remaining money after 2016.
The bank this week said former JPMorgan JPM.N investment bank boss Jes Staley would become its new chief executive in December.
It also warned today that its investment bank had seen weaker market conditions in October than a year ago.
Barclays set aside £290m in the latest quarter to compensate UK customers following an internal review of rates given on foreign exchange transactions between 2005 and 2012. It was the first provision the bank had made for such compensation.
It also made a £270m provision relating to the settlement of litigation regarding US mortgages, which had been previously announced.
Barclays reported an adjusted pretax profit of £1.43 billion for the three months to the end of September, from £1.59 billion a year ago and below the average forecast of £1.65 billion from analysts polled by the company.
