Barclays CEO's Links to Jeffrey Epstein Probed by U.K. Regulators -- Update
February 13 2020 - 3:51AM
Dow Jones News
By Simon Clark
LONDON -- Barclays PLC said U.K. regulators are probing the
relationship between its American Chief Executive Jes Staley and
Jeffrey Epstein, the disgraced financier who died in jail last
year.
An investigation by the Financial Conduct Authority is ongoing,
Barclays said Thursday.
"Mr. Staley retains the full confidence of the board, and is
being unanimously recommended for re-election at the annual general
meeting," the London-based bank said in a statement.
Barclays disclosed the investigation the same day it reported
annual results. Profit before tax rose 26% to GBP4.4 billion ($5.7
billion) in 2019 from 2018, but Mr. Staley gave a cautious outlook
for the year ahead. Barclays said it hit its target return on
tangible equity of 9.0% in 2019, excluding GBP1.58 billion of
litigation and misconduct costs, but improving on that will be
difficult.
"We continue to believe that it is appropriate to target a
return greater than 10%, and we are managing our business to
achieve that," Mr. Staley said in a statement. "However, given the
low interest rate environment, it has become more challenging to
achieve that target in 2020."
Executives at banks across Europe have blamed ultralow interest
rates for making the business of lending more challenging. Activist
investor Sherborne Investors has been waging a campaign to have
Barclays scale back in investment banking. Mr. Staley has defended
Barclays' mix of businesses, saying it makes the bank resilient to
market conditions by having a large U.K. retail and business bank,
a New York- and London-based corporate and investment bank and U.S.
credit cards. Mr. Staley said Thursday the model is working.
U.K. regulators are investigating the "characterization" Mr.
Staley gave of his relationship with Mr. Epstein to Barclays
executives, including Chairman Nigel Higgins, "and the subsequent
description of that relationship in the company's response to the
FCA," the bank said.
"Earlier in his career Mr. Staley developed a professional
relationship with Mr. Epstein," the bank said. "In the summer of
2019, in light of the renewed media interest in the relationship,
Mr. Staley volunteered and gave to certain executives, and the
chairman, an explanation of his relationship with Mr. Epstein. 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."
Write to Simon Clark at simon.clark@wsj.com
(END) Dow Jones Newswires
February 13, 2020 03:36 ET (08:36 GMT)
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