Jes Staley strengthens Barclays by leaving
LONDON, Nov 1 (Reuters Breakingviews) - If financial results were all that mattered, Jes Staley would be leaving Barclays (BARC.L) on a high. The American stepped down as chief executive of the UK lender on Monday, less than two weeks after it reported a healthy 15% return on tangible equity for the first nine months of the year. However, his six years in charge also brought repeated questions about his personal conduct, culminating in the regulatory probe into his relationship with convicted sex offender Jeffrey Epstein that triggered his departure.
The former JPMorgan (JPM.N) executive has delivered much of what he promised since taking over in December 2015. He dumped unproductive assets and severed Barclays’ historic links with Africa to focus on retail and investment banking in Britain and the United States. He also saw off activist investor Edward Bramson’s attempts to shrink Barclays’ wholesale unit. This year’s post-pandemic bounce in capital markets vindicated his stance read more , even though Barclays’ stock price has not: shareholders earned a total return of less than 3% during Staley’s tenure.
His personal judgment was more questionable. In 2016 he twice tried to identify a whistleblower who had warned about a senior recruit. That led to a reprimand, lengthy regulatory investigation and 642,000-pound fine. Last year, UK watchdogs opened a new probe into Staley’s characterisation of his relationship with Epstein, who killed himself in 2019 while awaiting trial on sex trafficking offences.
Staley says he had no contact with Epstein after taking charge of Barclays, and the UK Financial Conduct Authority and Prudential Regulation Authority have not published their preliminary findings. However, his decision to step down so that he can contest them implies regulators have serious doubts about his suitability to run a regulated financial institution.
Staley is the third successive Barclays CEO to leave earlier than expected: Bob Diamond resigned in 2012 following the Libor-rigging scandal and Antony Jenkins was forced out three years later. Barclays shares still trade at a discount to book value, suggesting investors think the current capital-markets boom is temporary. New boss C.S. Venkatakrishnan, who previously ran Barclays’ trading division, is likely to stick with his predecessor’s strategy. If he can do so with less personal drama, the bank may end up stronger.
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CONTEXT NEWS
- Jes Staley is standing down as chief executive of Barclays, the British bank said on Nov. 1, following British regulators’ investigations into his ties with convicted U.S. sex offender Jeffrey Epstein.
- Barclays said it was made aware on Oct. 29 of the preliminary conclusions of the Financial Conduct Authority and Prudential Regulation Authority’s investigation into Staley’s characterisation to Barclays of his relationship with Epstein, and the subsequent description of that relationship in Barclays’ response to the regulator.
- “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,” the bank said. The board was “disappointed” by the outcome, it added.
- Barclays said last year that Britain’s financial regulators were probing links between Staley and Epstein, who killed himself in 2019 while awaiting trial in the United States on sex trafficking offences. Staley has said his relationship with Epstein ended in late 2015, and that he regretted having any relationship with him.
- C.S. Venkatakrishnan, Barclays’ head of global markets, will replace Staley with immediate effect. Barclays shares were down 1.2% at 200 pence by 0840 GMT on Nov. 1.
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