London (AFP)
Barclays boss Jes Staley is the subject of an investigation by British regulators into his business ties with financier Jeffrey Epstein, which did not prevent the bank from renewing his confidence in him.
The announcement puts pressure on the chief executive of one of the largest financial groups in the world and overshadowed Thursday the good results for 2019 of the bank that Mr. Staley has put back on track in recent years.
According to a bank statement, the two main British financial regulators, the FCA and the PRA, have launched an investigation into the way in which Mr Staley spoke to his group about his past business ties with Jeffrey Epstein, a financier accused of trafficking of minors and who has since committed suicide in prison.
The investigation was opened after a first request from the financial gendarme FCA to which the group had given an initial response.
Mr. Staley had developed a business relationship with the American financier when he headed the private banking branch of JPMorgan, before he took over as head of Barclays.
Barclays says its chief executive officer confirmed to the board of directors that he has had no further contact with Jeffrey Epstein since he took office as boss of the British bank in December 2015.
After calling on a consulting firm on this matter and interviewing Mr. Staley, the Barclays board of directors believes that his boss "was sufficiently transparent" about "the nature and extent" of his relationship with Jeffrey Epstein.
- Teflon -
The group therefore maintains his "full confidence" and supports his re-election to his post at the next general meeting of shareholders in May.
Barclays specifies that the board of directors fully cooperates with the regulators in their investigation.
This is not the first case involving Jes Staley, who was forced to pay a fine in 2018 for trying to identify a whistleblower at the bank.
"Like Teflon: it's a way of describing Jes Staley. Others might be less nice," said Neil Wilson, analyst at Markets.com.
"After the fine linked to the whistleblower, it seems that the cat could have exhausted the number of its lives. I wonder if it can survive this", he wonders.
For David Madden, an analyst at CMC Markets, this affair "does not help his reputation or that of Barclays" especially as Mr. Staley has just obtained a substantial increase in his annual compensation to 5.9 million pounds. "This generous increase is not good," he said.
These announcements on the links of Mr. Staley and Jeffrey Epstein relegated to the background the publication of the annual results of the bank and resulted in a drop of 2.26% to 175.28 pence of the price on the London Stock Exchange around 08:50 GMT.
- Increase in profits -
The group released a 54% jump in net profit to 2.46 billion pounds in 2019, thanks to a drop in the cost of litigation from year to year and the good performance of its investment bank .
Despite huge provisions related to the PPI credit insurance scandal, the total cost of litigation has decreased by a few hundred million pounds compared to 2018.
Barclays has achieved a 9% return on equity for 2019 as planned and continues to target a figure above 10% but recognizes that this objective will be difficult to achieve in 2020 given the low interest rate environment in the world .
This indicator is closely monitored by shareholders since it gives an idea of the profits generated in relation to the capital invested.
Mr. Staley also expects "a significant reduction in charges related to litigation from this year", which will allow the group to further reward its shareholders.
Barclays has still not said whether it supports the resolution submitted at the next general meeting by a group of shareholders who want to push the bank to stop funding fossil fuels.
According to its promoters, including the NGO ShareAction, this is the first time that a resolution on climate change will be proposed to the vote with a European bank.
© 2020 AFP