Barclays boss says sorry for breaking rules to protect whistleblowers

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Barclays chief executive Jes Staley has apologised for breaking rules designed to protect whistleblowers as he faces shareholder pressure amid concerns over his conduct.

He told investors at the bank's annual general meeting in London that he made a mistake after he attempted to identify a whistleblower at Barclays.

Investors have been urged to abstain from a vote backing his re-election at the AGM over the affair, while it also recently emerged that his pay will be docked over the governance failings.

Addressing the shareholder gathering, he said: "I feel it is important that I acknowledge to you - our shareholders - that I made a mistake in becoming involved in an issue which I should have left to the business to deal with.

"I have apologised to the board, and I would today like to apologise to you as well, for that error."

Mr Staley is also fighting to save his reputation after it was recently revealed that he intervened in a dispute between his brother-in-law and US private equity giant KKR, which is a major Barclays client.

KKR has since reportedly blocked Barclays from winning new mandates with the group in protest at the move.

Barclays chairman John McFarlane told investors that while the group was close to completing its overhaul, "further challenges remain".

He said the bank still needs to resolve a "number of material historical legacy conduct issues", as it continues to fight US authorities over allegations about its part in a mortgage bond mis-selling scandal.

It also faces the imminent conclusion of a criminal investigation by the Serious Fraud Office into the bank's 2008 emergency fundraising.

It is understood the Financial Conduct Authority has also reopened its probe into the deal and is reviewing new evidence that could prompt it to reconsider a £50 million fine against the banking giant four years ago.

Mr McFarlane also sought to assure over the appointment of Sir Ian Cheshire as chairman of the lender's new ring-fenced bank after concerns were raised over the number of directorships he holds, as well as his previous role at failed group Bradford & Bingley.

Barclays has since announced that Sir Ian will cut the number of boardroom roles he currently holds by the end of September.

Mr McFarlane said: "We have Ian's commitment that he will, over the coming months, adjust his commitments to be fully compliant with this requirement."

He added: "Ian stood down as a director of Bradford & Bingley over eight years ago and since has a track record of success as a chief executive officer and chairman."

First quarter figures from Barclays at the end of last month showed that group pre-tax profit more than doubled to £1.68 billion, up from 793 million during the same period a year earlier.

But investors were disappointed by a 4% drop in income from its investment banking markets division to £1.35 billion, which saw it lag behind rivals.

Mr McFarlane said on Wednesday: "We have taken significant steps over the past twelve months to bring the company to prosperity.

"That said, there remains more to do."

"Despite a few remaining dark patches, the light at the end of the tunnel gets brighter with each step," he added.

One shareholder at the AGM asked in reference to Mr Staley's conduct: "Today, for the sake of Barclays PLC, investors and shareholders, don't bring any more embarrassment to the bank - will you save the integrity (of the bank) and resign today?"

Mr McFarlane said in response: "If I thought the CEO should go, I would say so.

"I think the CEO made a mistake...

"At the time he was a relatively new CEO, he was not here for very long, it's no excuse, but people need to learn these jobs... we've accepted that he won't do it again, and I think we've taken the right action here"

Another private shareholder was unimpressed, saying it "beggars belief" that Mr Staley did not know the rules on whistleblowing, or was not made aware of them when he joined the bank.

On Brexit, Mr Staley said there has been "very rich dialogue between the bank, the government and regulators, who have been very open to listening to us".

Barclays is planning to bulk up its Dublin offices, home to about 100 staff, after Britain leaves the EU.

Mr Staley added "contingency operations are beginning to be operational now" to ensure "seamless service across the EU" but that no matter what they choose to do, it will be done in a way that "protects integrity of the bank in the UK" and that results in "no degree of disruption post-Brexit".

 

In response to one shareholder asking about Labour leader Jeremy Corbyn's comments on "greedy bankers" made on Tuesday, Mr McFarlane said it is "well known that politicians have impeccable judgement on all matters".

He added: "These are opinions as you know, the facts speak for themselves.

"We pay for performance, if it's not there, we don't pay for it...it's in our interest to have low costs."

Talking about executive pay broadly, he said: "I think executive compensation is generally too high, so I would support Jeremy Corbyn in that respect."

Barclays just needs "to make sure that we won't pay for non-performance and I think we do that really quite well", he added.