Barclays is backing its CEO, Jes Staley, after British authorities opened a probe into his contacts with convicted sex offender Jeffrey Epstein when Staley previously headed up JPMorgan's private bank
London (AFP) - Barclays bank on Thursday gave its full backing for Jes Staley to continue as chief executive amid a UK regulatory probe into his historical links with convicted sex offender Jeffrey Epstein which he “deeply regrets”.
Based on information already gathered, “the Board believes that Mr Staley has been sufficiently transparent with the company as regards the nature and extent of his relationship with Mr Epstein”, Barclays said in a statement after revealing that Britain’s Financial Conduct Authority and the Bank of England’s regulatory arm had launched an investigation.
The statement added that “Staley retains the full confidence of the Board, and is being unanimously recommended for re-election at the Annual General Meeting” on May 7.
“In deciding whether to recommend Jes Staley for re-election, the Board has carried out its usual formal and rigorous performance assessment, which it does in respect of the effectiveness of each of the directors,” Barclays said.
The British bank added that it would “continue to cooperate fully with the regulatory investigation”.
Barclays said that after it was revealed that Staley had “developed a professional relationship” with Epstein at US investment bank JPMorgan, the Barclays CEO last summer volunteered information to the chairman and fellow executives at the British lender.
“Mr Staley also confirmed to the Board that he has had no contact whatsoever with Mr Epstein at any time since taking up his role as Barclays Group CEO in December 2015,” the statement added.
Speaking later on a conference call with reporters, Staley said his last contact with Epstein had been in the second half of that year – and seven years after Epstein had been convicted for sex offences.
“For sure, with hindsight with what we know now, I deeply regret having any relationship with Jeffrey,” Staley said Thursday, having embarked on a “professional relationship” with Epstein in 2000.
This was when Staley became head of JPMorgan’s private bank, of which Epstein was a client.
A wealthy financier, Epstein was found dead in a US prison last August while awaiting trial on allegations that he trafficked girls as young as 14 for sex.
- Profits overshadowed -
Following news of the probe, Barclays’ share price slid 2.9 percent to 174.08 pence in London late morning deals.
“The story overshadowed the bank’s full-year figures,” said David Madden, analyst at CMC Markets UK.
Barclays on Thursday said that its net profit surged 54 percent to £2.64 billion ($3.4 billion, 3.1 billion euros) in 2019 from a year earlier.
“2019 was another year of progress for Barclays, continuing the positive momentum across our business and allowing us to increase returns to shareholders,” Staley said in a separate earnings statement.
“Looking ahead… We will accelerate our digital journey, and continue to play a leading role in capturing innovation and bringing it to life, at scale, for millions of customers and clients,” he added.
Richard Hunter, head of markets at Interactive Investor, said Barclays had “delivered a largely impressive set of numbers, especially given the wider challenges facing the global economy and, therefore, the banking sector as a whole”.
Hunter added that “a combination of strong cost control and some useful income contributions from most of its units, such as the investment bank which has probably seen some benefit following the demise of the Deutsche Bank equivalent, has culminated in” a rise in profits.
Barclays meanwhile revealed also that Staley had earned £5.93 million last year, up from £3.86 million in 2018.
“The timing of the generous rise isn’t great in light of the Epstein story,” noted CMC Markets UK’s Madden.