Shares in Barclays (BARC) fell 1.6% to 199p, having earlier seen heavier losses, as CEO Jes Staley stepped down following the UK Financial Conduct Authority's investigations into his relationship with convicted sex offender Jeffrey Epstein.
Investors are clearly spooked by the sudden change at the top. The response came amid preliminary conclusions from the regulator’s investigation into Staley's dealings with Epstein.
‘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 chief executive and as a director of Barclays,’ the company said.
The board also expressed its regret at the course of events, commenting: ‘Mr Staley has run the Barclays Group successfully since December 2015 with real commitment and skill’.
REPLACEMENT LINED UP
Staley will be replaced by an internal candidate - head of global markets C.S. Venkatakrishnan - subject to regulatory approval.
Shore Capital analyst Gary Greenwood commented: ‘The news of Mr Staley’s sudden departure is very disappointing to us as we believe he has done an excellent job in improving the performance of the group in recent years, both in terms of strengthening its capital position and increasing profitability.
Greenwood added that his replacement is ‘experienced and well-respected’, noting this should mean modest disruption associated with the transition.
He added: ‘Fundamentally, we believe that Barclays is in a good place, having just reported a strong set of Q3 results. The prospect of delivering a sustainable double-digit return on tangible equity now looks more realistic than it has for some years, especially given the backdrop of potentially rising interest rates.’
