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Bank boss quits

Barclays CEO Staley leaves over Epstein links

Jes Staley

Jes Staley in Glasgow for the opening of its new campus

Barclays Bank chief executive Jes Staley will leave the bank with immediate effect following an inquiry into his links to the late convicted sex offender Jeffrey Epstein.

The bank’s board said it is “disappointed” with the outcome of the report by the Financial Conduct Authority.

It was made aware on Friday night of the preliminary conclusions from the City watchdog’s investigation, but offered no further information.

The decision prompted a mixed reaction in the City, particularly among those who recognise his positive impact on the bank. Its shares closed 1.76% lower, but one analyst said “the market seems to be regretting Mr Staley’s sudden departure”.

Mr Staley, who was in Glasgow recently for the opening of its campus on the Clyde, said he intends to contest the findings. Barclays pointed out that the investigation did not find that Mr Staley was aware of any of Epstein’s alleged crimes.

He will be replaced by the bank’s head of global markets, C S Venkatakrishnan, from today.

Barclays said Mr Staley was entitled to 12 months’ notice and will therefore continue to receive his current fixed annual pay of £2.4 million in cash and Barclays shares, a pension allowance of £120,000 and other benefits until October 2022. 

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Speaking in February last year, Mr Staley said: “For sure, with hindsight with what we know now, I deeply regret having any relationship with Jeffrey.”

He said he had embarked on a “professional relationship” with Epstein, a wealthy financier, in 2000, when Mr Staley became head of JPMorgan’s private bank. Epstein was a client.

Mr Venkatakrishnan will receive fixed annual pay of £2.7million – delivered 50 per cent in cash, paid monthly, and 50% in Barclays shares.

Barclays said today: “Barclays and Mr Jes Staley, group chief executive, were made aware on Friday evening of the preliminary conclusions from the FCA and the PRA [Prudential Regulation Authority] of their investigation into Mr Staley’s characterisation to Barclays of his relationship with the late Mr Jeffrey Epstein and the subsequent description of that relationship in Barclays’ response to the FCA.

“In view of those conclusions, and Mr Staley’s intention to contest them, the Board and Mr Staley have agreed that he will step down from his role as Group Chief Executive and as a director of Barclays.

“It should be noted that the investigation makes no findings that Mr Staley saw, or was aware of, any of Mr Epstein’s alleged crimes, which was the central question underpinning Barclays’ support for Mr Staley following the arrest of Mr Epstein in the summer of 2019.

“The board is disappointed at this outcome. Mr Staley has run the Barclays Group successfully since December 2015 with real commitment and skill.

“Supported by the senior team which he largely helped build and on whom the Barclays Group will be relying for the future, Mr Staley clarified the Barclays Group’s strategy, transformed its operations and materially improved its results.”

Epstein, whose links to the Duke of York are also subject to legal proceedings, was found dead in a New York prison in August 2019 while awaiting trial on allegations that he trafficked girls as young as 14 for sex. 

Russ Mould, investment director at AJ Bell said the market seems to be regretting Mr Staley’s sudden departure.

“While the move was almost inevitable… Staley’s tenure since taking over in December 2015 has ultimately proved a successful one.

“Profitability has improved, the balance sheet is stronger and, judged purely in share price terms, Barclays has outperformed its UK counterparts – albeit the shares are still lower. Given Staley’s time in charge took in the seismic Brexit vote and the pandemic though, the slight decline in Barclays’ market valuation is not surprising.

“His decision to face down pressure from activist investor Edward Bramson to spin off Barclays’ investment banking arm has been vindicated in the short term at least by the recent bumper period for this part of industry driven by corporate M&A. 

“The retained focus on investment banking notably enabled Barclays to emulate the bumper third quarter results posted by its US counterparts.

“Staley’s commitment to the investment banking side of the business should probably have come as little surprise given the ex-JP Morgan man is steeped in it.

“This is not the first time Staley has faced negative headlines, having received a £642,430 fine over a whistleblowing scandal back in 2016, and ultimately his departure shows how important governance can be, particularly for a high profile company like Barclays which faces the glare of political and regulatory pressure more than many other businesses.

“An internal replacement, head of global markets C.S. Venkatakrishnan or Venkat for short, suggests the bank is prioritising continuity for the time being.”

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