Media playback is unsupported on your device Media caption Antony Jenkins: "This is about running the bank in line with our values"

Barclays has said it will cut 3,700 jobs following a strategic review, as it aims to reduce costs by £1.7bn.

Almost half of those job losses will come at its investment bank.

Barclays also reported a plunge in pre-tax profit to £246m in 2012, from £5.9bn in 2011, after setting aside compensation for mis-sold products and a loss on the value of its own debt.

Barclays boss Antony Jenkins told the BBC: "It will take years before people change their impression of us."

He added: "I'm not daunted by that at all."

Of the job cuts, 1,800 will come from its corporate and investment banking, with the vast majority in Asia, and 1,900 will come from its European retail and business banking.

Barclays - which currently employs 140,000 staff - said very few of the job losses would be in the UK.

The bank is seeking to rebuild its reputation after a string of damaging incidents. It was fined £290m last year for attempting to rig the Libor interest rate, and has also been caught up in the industry-wide mis-selling scandals involving payment protection insurance (PPI) and interest rate investment products.

Compensation

On an adjusted basis, profits rose by 26% to £7.05bn, in line with analysts' expectations.

Shares in the bank gained 8.6% to 327p.

Barclays has been rocked by the Libor and mis-selling scandals and Mr Jenkins, who replaced Bob Diamond as chief executive in August, has pledged to transform the banking group.

The bank set aside £1.6bn to compensate customers mis-sold PPI and £850m for those mis-sold interest rate hedging products.

"You should not sell products to customers that are not in their interests," Mr Jenkins told the BBC's Today programme.

"I've been very clear that we have to run this business in a way that delivers for customers and clients."

The extra provision from Barclays for PPI, which includes £600m announced by Mr Jenkins earlier this month, takes the combined total for overall PPI compensation for the UK banking industry to £13.6bn.

Bonus pool

Barclays also took a loss of £4.6bn after revaluing its own debt.

The new chief executive looks to have done enough, with analyst opinion remaining positive in tone Keith Bowman, Hargreaves Lansdown

The bank confirmed that it was closing its Structured Capital Markets business, which helps clients avoid tax.

It said the 3,700 job cuts, which will take place this year, would result in a restructuring charge of close to £500m in the first quarter of 2013.

The average bonus it paid last year fell 13% to £13,300, while the average bonus paid to staff at its investment bank fell 17% to £54,100.

Barclays raised its dividend as a signal of increased confidence to shareholders. The dividend on ordinary shares went up from 6p per share to 6.5p - a rise of 8%.

But the dividend payout of £733m was still dwarfed by the value of bonuses paid or set aside for staff, mainly in the investment bank.

The overall bonus pool, though down by 14% from 2011, still amounted to £1.85bn.

Barclays also revealed that its compensation ratio - staff pay as a proportion of net revenues - had fallen from 42% to 38%.

Media playback is unsupported on your device Media caption Chris Skinner, banking analyst: "They're trying to draw a line in the sand"

It said that while this was progress, it was "not the destination", as it believes a ratio in the mid-30s is a sustainable position in the medium term.

'Legacy issues'

Mr Jenkins said in his review that he planned to focus investment in the UK, the US and Africa, while reducing the bank's presence in continental Europe and Asia.

He also plans to scale back Barclays' investment bank.

However, in 2012 the investment bank continued to be very profitable for the group, with statutory profits rising 37% to £4.06bn.

Profits at its UK retail and business banking division dropped 71% to just £292m after PPI and interest rate swap provisions, but rose 4% to £1.47bn on an adjusted basis.

Keith Bowman, equity analyst at Hargreaves Lansdown, said that while Barclays faced "a series of legacy issues" such as Libor, and increased regulatory and capital requirements, things were looking up for the bank.

"Significant management changes have been implemented, a universal banking business model offers its own diversification attractions, whilst cyclical economic exposure and the lack of government ownership also appeal," he said.

"For now, despite a 60% plus gain in the share price over the last six months alone, the new chief executive looks to have done enough, with analyst opinion remaining positive in tone."