Barclays Slips On FCA Epstein Probe

Barclays (BCS) reported a better than expected profit before tax of £6.2bn for 2019, up 9% year on year as its investment bank revealed bumper returns from fixed-income trading.

Investors weren’t doing much celebrating though as shares were down this morning on news that the UK regulator was probing the historical links between Chief Executive Jes Staley and disgraced US financier Jeffrey Epstein, who reportedly committed suicide while awaiting trial on sex trafficking charges.

The bank said its board had looked into media reports on Staley’s professional relationship with Epstein, and probed Staley’s characterization of that relationship.

The Financial Conduct Authority and the Prudential Regulation Authority are investigating. The bank said its board believes Staley has been sufficiently transparent about his ties to Epstein, whom Staley said he had not seen since taking over as Barclays CEO in 2015.

In a busy day for UK companies on the reporting front, Centrica (CPYYY) – the owner of British Gas – also revealed operating profits had plunged 35% following the government’s price cap. The UK’s largest energy supplier said profits for 2019 were down to £901m, compared to £1.39bn the previous year. Having seen shares stage an impressive 43% recovery from all-time lows back in August to reach a peak of 93p last month, the stock has capitulated 16% after this morning’s update.

Centrica’s results were in stark contrast to the news coming from energy giant BP (BP) which gave the most ambitious promise yet from a major oil company to become carbon neutral. BP’s new CEO Bernard Looney pledged that the firm will have zero net carbon emissions by 2050 or sooner, including both its own operations and upstream production. The sector has found itself under scrutiny as the concept of ESG investing has gained momentum over the past year, with BlackRock (BLK) - the world’s largest investment firm - recently throwing its weight behind the movement.

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