Barclays has today reported a lower than forecast profit of £3.5 billion for 2018, as it set aside cash to cushion against Brexit losses and its trading business weathered a difficult fourth quarter.  

Barclays did show signs of progress in its under-pressure investment bank, where profit for the full year increased 15% to £2.6 billion as its equities trading unit saw income rise 25%. 

Barclays chief executive Jes Staley is locked in a high-profile tussle over the bank's strategy with activist investor Edward Bramson.

He believes the lender should ditch a costly plan to grow its investment bank and focus on other less risky parts of its business. 

Bramson on February 5 sought to ratchet up pressure on the bank by tabling a resolution that would see him win a board seat, a bid which investors said was unlikely to succeed but which has sharpened focus on the performance of the investment bank. 

The bank's fixed income, currencies and commodities trading business weathered the volatile markets of the fourth quarter better than its Wall Street rivals with revenue down 6% compared with double digit falls at Goldman Sachs, Citi and JPMorgan. 

However, there were signs that other parts of the lender are suffering as profits fell 3% in the Barclays UK division. 

The bank also saw a 20% decrease in corporate lending income, which it attributed to resources being deployed to higher-returning business elsewhere. 

Barclays' £150m Brexit provision followed similar moves by HSBC and Royal Bank of Scotland in recent days. 

Barclays Bank CEO Jes Staley

Barclays said the provision reflected the lesser of two downside economic scenarios, in which growth would slow to 0.3% and the country's unemployment rate rise to 5.7%. 

Barclays said it would pay a dividend of 6.5 pence per share and signalled intentions to return more capital via dividend increases and buybacks when it was practical to do so. 

The bank however reported its core capital ratio fell to 13.2% from 13.3% a year ago.

The dip is likely to renew a debate over its ability to return more capital to shareholders at a time when rivals Lloyds Banking Group and RBS are ramping up payouts. 

Today's results also show that Barclays' CEO Jes Staley's total pay package for 2018 fell to £3.36m, down from £3.87m the previous year. 

He was the lowest paid among the four biggest British bank bosses. 

Including conduct and litigation charges, the bank reported a profit of £1.4 billion compared to a £1.9 billion loss in 2017. 

Barclays' International division, which houses its investment bank, reported a profit before tax of £3.9 billion, in line with analysts' expectations of £3.95 billion.