Barclays profit misses views as CEO faces regulatory probe over Epstein linkFebruary 13, 2020
Barclays PLC said Thursday that Chief Executive Officer Jes Staley retains the board’s full confidence despite a U.K. regulatory investigation concerning his relationship with Jeffrey Epstein.
The British lender said that earlier in his career Staley developed a professional relationship with Epstein, which last year he explained to certain executives at Barclays and Chairman Nigel Higgins.
The board said the explanation was made following media reports in the past six months that highlighted historical links between Staley and Epstein, who died by suicide last year in a Manhattan jail cell while facing federal sex-trafficking charges.
The U.K.’s Financial Conduct Authority and Prudential Regulation Authority are now investigating how Staley characterized the relationship to Barclays and how the company subsequently described it to the FCA.
The U.K. lender said it will continue to cooperate fully with the regulatory investigation and noted Staley had no contact with Epstein after becoming CEO in 2015.
“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. Accordingly, Mr. Staley retains the full confidence of the Board,” Barclays concluded.
Staley will still be unanimously recommended for reelection at the next annual general meeting on May, 7, Barclays said.
Barclays BCS, -0.11%BARC, -1.97% made a pretax profit of 4.36 billion pounds ($5.65 billion) for the 2019 compared with GBP3.49 billion a year earlier.
Analysts had expected Barclays to report a pretax profit of GBP4.44 billion, taken from FactSet and based on 14 analysts’ estimates.
The British bank booked a GBP1.4 billion provision for expected payment protection insurance costs in the third quarter of 2019, in line with previous guidance.
Net operating income slightly rose to GBP19.72 billion from GBP19.67 billion, when it was forecast to reach GBP21.53 billion, taken from FactSet and based on 15 analysts’ estimates.
Income from Barclays’ corporate-and-investment bank rose 4.7% to GBP10.23 billion.
The London-listed lender said its return on tangible equity came to 9.0% for the year and added that it would be challenging to achieve a target greater than 10% in 2020 The company had previously said it aimed for a RoTE greater than 9% in 2019, and 10% in 2020.
The bank declared a final dividend of 9.0 pence a share, up from 6.5 pence a share a year earlier.
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