For the second day running, the feature event here on Thursday was in the balance until its final moment as Unowhatimeanharry, the beaten favourite behind Nichols Canyon in the Stayers’ Hurdle at Cheltenham, turned around the form under a bold ride by Noel Fehily and held off his old rival by a head. Ruby Walsh threw everything into his finish […]
Jes Staley, the chief executive of Barclays, has admitted he made a mistake in his repeated attempts to unmask a whistleblower but said he did not offer his resignation over the scandal.
The American is under mounting pressure after a shareholder advisory service, ISS, advised investors to abstain from backing his re-election to the board at next month’s annual general meeting because of the ongoing investigation by the City regulators into breaches of whistleblowing rules.
“As I’ve said I made a mistake. I was trying to protect a vulnerable colleague. I should have left the organisation to handle it,” said Staley, who was forced to take questions on the matter as he presented the bank’s first-quarter profits.
Staley refused to provide any more details about the situation, which has stunned the City since the bank said two weeks ago that his bonus would be cut after he became too involved in the whistleblowing case. This related to the conduct of Tim Main, who worked with Staley at US bank JP Morgan and was then recruited to Barclays in a senior role last June.
He had not offered to resign, Staley said, in the face the regulatory investigation into himself and the bank by the Financial Conduct Authority and the Bank of England’s Prudential Regulation Authority.
Barclays also said it would be creating 2,000 technology jobs to “draw upon the talent pool” in the UK. Half of those have already been filled, with the rest being hired in the coming three years.
Staley attempted to focus on the bank’s profits, which more than doubled to £1.6bn. He said this was in part driven by a reduction in operations it is aiming to sell off or close down.
The figures do not include a £884m accounting hit from the value of Barclays’ stake in its African business, which is in the process of being sold down under Staley’s plan to end its global ambitions and focus on the US and the UK.
“We are now just two months away from completing the restructuring of Barclays as a transatlantic consumer, corporate and investment bank and there is further good reason in this quarter’s performance to feel optimistic for our prospects,” Staley said.
But the City was unconvinced and the bank’s shares were down by almost 5% – the biggest faller in the FTSE 100 in early trading on Friday.
Nicholas Hyett, an equity analyst at Hargreaves Lansdown, said: “In fairness to Jes Staley, who will be hoping that these results refocus attention on the business rather than past misdemeanours, there are signs of progress in the numbers. The wind-down of the bad bank is approaching completion, cost control seems to be in hand, and the UK is showing resilience.
“However, there is disappointment too. Chief among them is the poor performance from the investment bank’s markets division, which saw income fall 4% compared with 9% growth at Deutsche Bank and a 15% rise among the big five US banks.”
Tushar Morzaria, the Barclays finance director, warned that legal proceedings and investigations relating to past deeds were yet to be resolved. “For example, the UK Serious Fraud Office has stated that it intends to make a decision shortly in respect of matters relating to our capital raisings in 2008,” he said. “This decision could impact on the timing and/or outcome of other actions related to these capital raisings.”
The bank has previously disclosed that the City regulator wants to fine it £50m for reckless misconduct during the time of the cash calls which kept it out of the clutches of the government bailout programme of the time. Barclays is fighting this penalty which has been put on hold while the SFO investigation continues.
Morzaria said he hoped the provisions for payment protection insurance would be sufficient, despite an increase in complaints since March. The Financial Conduct Authority has set a deadline for complaints on the UK’s biggest mis-selling scandal – which has cost the industry more than £35bn – of August 2019, which may encourage a further rush of claims.