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Whistleblower affair not expected to unseat Barclays CEO, analysts say

Jes Staley is expected to remain in his role as CEO of Barclays Plc despite being censured for trying to identify a whistleblower, according to analysts speaking to S&P Global Market Intelligence.

The bank received an anonymous letter in June 2016 raising concerns about a senior executive recruited earlier that year. Staley tried to identify the author of the letter, which was treated by Barclays Bank as a whistleblow, Barclays said. The CEO explained that he had been trying to protect a colleague from what he believed to be an unfair attack, and the bank said he had thought he was within his rights to identify the author.

The author was not, in fact, identified by the bank, although "a person familiar with the matter" has told Bloomberg News that the senior executive in question was Tim Main, who formerly worked with Staley at JPMorgan Chase & Co.

Ian Gordon, a London-based banks analyst at Investec, said his "working assumption" was that Staley would stay in his position.

"I don't deny being surprised, but none of this changes to any material extent the investment case for Barclays," he said in an interview. "This is based on the assumption that Staley stays in situ, but suffers a penalty."

The bank said it issued Staley with a formal written reprimand and will make a "very significant" adjustment to his pay, but has confidence in his "otherwise exemplary record" and expects to reappoint him at the annual general meeting May 10. However, the Financial Conduct Authority and Prudential Regulation Authority are conducting their own separate probe.

Another London-based analyst, speaking to S&P Global Market Intelligence on condition of anonymity, said Barclays would be anxious to hold on to Staley, who has been at the helm since 2015.

"The statement from Barclays was quite adamant that Staley has been given a slap on the wrist for his behavior. Reading between the lines, the bank is making every possible justification for keeping him in place. He has been well received by the markets since becoming CEO, and there is a perception that he has put the bank on the right track," the analyst said in an interview.

"Not to downplay the seriousness of what he has done, but I wouldn't see this as a sufficiently 'criminal' offence for him to be removed from the post. If it was money laundering or LIBOR rigging then it might be different."

The analyst said he was satisfied that Barclays had carried out its own internal investigation and disciplinary procedure.

Staley joined Barclays New York-based hedge fund BlueMountain Capital, having previously headed JPMorgan's investment bank. Barclays swung back into profit in the fourth quarter of 2016, posting £99 million profit after tax compared with a £2.42 billion loss for the same period in 2015.