By Marcus Leach

Barclays bank have announced a nine per cent fall in profits for the first quarter of 2011.

Further to that there will be continued restructuring of their complex Cayman Islands fund that manages their most toxic assets, as well as fears of fallout over new chief executive Bob Diamond's proposed £27 million pay deal.

The bank's shares fell 4 per cent, to 290p, in early trading after its £1.65 billion of profits disappointed investors.

Mr Diamond said that given the challenging market he was happy with the start to the year.

“We have made a good start in 2011 in a challenging external environment," he said.

:Another solid quarter of profits has further strengthened our Core Tier 1 ratio to 11%. We are making good progress on execution in line with our strategic priorities, with costs and risks carefully managed in the quarter, and our returns on equity and tangible equity (excluding own credit) above 10% and 12%, respectively.

"We continue to engage actively with governments and regulatory bodies in the UK and internationally on banking reform. We are committed to assisting the process of change and are aligned with the objectives of reducing the risk of failure of financial institutions.

"We believe that resolution plans will play a vital role in allowing a bank to fail while ensuring that essential banking services remain operable. We are proactively engaged with the UK Financial Services Authority, the Financial Stability Board and at a G20 level to help develop and put in place such plans on a cross-border basis."