Barclays freezes ex-boss bonuses over Epstein probe

The British bank suspended £22 million of bonuses owed to ex-boss Jes Staley. PHOTO: REUTERS

LONDON (AFP) - British bank Barclays on Wednesday (Feb 23) suspended £22 million (S$40 million) of bonuses owed to former boss Jes Staley amid a probe into his links with US sex offender Jeffrey Epstein.

Barclays has frozen its former chief executive's unvested long-term bonus share awards - worth US$30 million (S$40 million) - while he remains the subject of a regulatory investigation, the group said as it posted surging annual profits.

The bank said its nominations committee made the decision "pending further developments in respect of the regulatory and legal proceedings related to the ongoing investigation regarding Mr Staley".

The former boss, who stepped down last year, was nevertheless entitled to a contractual entitlement of £2.4 million in cash and shares - equivalent of 12 months' salary - as well as pension and other benefits.

 Mr Staley resigned in November ahead of contesting the outcome of the UK investigation into his historical relationship with Epstein, the American financier who killed himself in 2019 while awaiting trial on charges of trafficking underage girls for sex.

Mr Staley quit after UK regulators informed the Barclays board of the preliminary conclusions of an ongoing probe.

The bank has stressed that watchdogs have made no findings that Mr Staley saw or was aware of Epstein's crimes.

Mr Staley for his part has expressed deep regret at having had a professional relationship with Epstein prior to becoming Barclays' head in late 2015.

Epstein continues to cause huge fallout elsewhere, with Queen Elizabeth II's second son, Prince Andrew, this month settling a sexual assault lawsuit for an undisclosed sum with a woman who says she was "lent out" for underage sex by the late financier.

The Prince has not been criminally charged and has denied the allegations.

Profits surge

Barclays on Wednesday also revealed that it had beefed up its staff bonus pool after 2021 net profits more than quadrupled as the economy recovered from coronavirus fallout.

Profit after tax surged to almost £6.4 billion, helped by the release of £700 million that had been set aside for bad loans during the pandemic.

That compared with a £1.5 billion profit the prior year, when Barclays had taken a £4.8 billion charge to cover Covid-19 fallout.

The bank ramped up its total bonus pool by almost a quarter to more than £1.9 billion, becoming the latest UK lender to shrug off Britain's cost of living crisis with dizzying staff incentives.

Addressing MPs on the state of the economy, Bank of England governor Andrew Bailey on Wednesday asked retail banking giants to reflect on the current high cost of living situation for the bulk of Britons when handing out big bonuses.

Mr Bailey sought also to downplay his recent comments that British workers should be careful about asking for wage increases with inflation at the highest level in decades.

"I'm not saying people should not take pay rises. It was in the context of large pay rises," he told the cross-party panel of lawmakers.

"If everybody tries to get ahead of the shock that we've had from outside, we'll get the second round effects and it will get worse, that's the problem."

On executive pay and bonuses in reaction to a question from Ms Angela Eagle, an MP from the main opposition Labour party, Mr Bailey told the Treasury Committee: "When you're thinking about it, please reflect on the economic situation we're in with this very big economic shock coming in from outside."

Barclays, like the banking sector in general, says big bonuses are required to avoid losing talent to rivals.

On Wednesday, it said the 2021 profits performance was "driven by an improved macroeconomic outlook" and buoyed also by reduced unsecured lending balances and a benign credit environment.

Leadership after Mr Staley

"Barclays demonstrated a clear and sustainable path to growth over the course of 2021," said chief executive C.S. Venkatakrishnan.

The annual results are the first under Mr Venkatakrishnan, who was promoted from his role as head of global markets following Mr Staley's sudden departure.

Barclays on Wednesday named Ms Anna Cross as its new finance director with effect from April.

The deputy finance director was the first woman to take the top finance job at the lender.

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