Barclays chief fights back with surging profits
UNDER-FIRE Barclays boss Jes Staley made the case to keep his job today as profits soared despite a surprise setback for its investment bank.
Staley faces investigations by watchdogs after he broke rules designed to protect whistleblowers. He sought to identify the author of notes to the board of the bank which he felt were smears on a friend and colleague.
The board has reprimanded Staley (pictured) and will chop his pay.
The F i n a n c i a l C o n d u cc tt Authorit y is likely t oo demand a more severe punishment than that. At the moment the board says it backs Staley. Today Barclays saw profits for the first quarter more than double too £1.7 billion. Staley’s shake-up will see it focus on the UK High Street, the City and Wall Street.
But the bank’s investment banking arm had a disappointing quarter, with income down 4%. Rivals have had a strong period in bond, equity and M&A activit y. Barclays is also taking a £884 million accounting hit from the sale of its African arm.
The shares today slipped 4%, or 9p, to 214p.
Finance director Tushar Morzaria denied the stronger picture across the overall group was another “false dawn”. He told the Standard: “It does feel different. We have closed a third of this bank. We are as close to the finishing line as you could be without being over it.” Morzaria declined comment on the investigation into Staley, but added: “I think anyone would say he is doing a fantastic job for the company.”
Staley said: “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.” He admits he “made a mistake”, tryinging to “protect a vulnerable collealeague”. Investor group ISS ssays shareholders should abstain from backing his re-election.
Barclays says it will create 2000 jobs in the next three years, mostly in IT. SSome of these will be agency peopeople moving in-house.
It is also awaiting the resolution of questions about the money it took from Qatar at the height of the financial crisis. It said the UK Serious Fraud Office intended to make a decision shortly about “matters relating to our capital raisings in 2008”.
Nicholas Hyett a t Ha r g re ave s Lansdown said: “In fairness to CEO 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.”
@SimonEngStand