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* CEO probed over ties to financier
* Maintained contact with Epstein after 2008 conviction
* Staley retains full confidence of board
* Barclays profits rise 9% on trading gains
(Adds further details, share reaction, quote from Staley)
By Lawrence White and Iain Withers
LONDON, Feb 13 (Reuters) - Britain's financial regulators
are probing historical links between Barclays Chief
Executive Jes Staley and the U.S. financier Jeffrey Epstein, who
killed himself while awaiting trial on sex trafficking charges,
the bank said on Thursday.
Barclays said its board had looked into media reports on
Staley's relationship with Epstein, and probed Staley's
characterisation of it. 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.
Speaking to reporters on Thursday, Staley said he regretted
his relationship with Epstein, which began in 2000 while he was
employed by JPMorgan and "tapered off significantly"
after he left the Wall Street lender.
The relationship ended in late 2015, Staley said.
"I thought I knew him well, and I didn't. I'm sure with
hindsight of what we all know now, I deeply regret having had
any relationship with Jeffrey Epstein," he said.
The New York Times last year said that Epstein had referred
"dozens" of wealthy clients to Staley when the CEO ran
JPMorgan's private banking business.
It also reported that Staley visited Epstein in prison when
he was serving a sentence between 2008-09 for soliciting
prostitution.
Staley also went to Epstein's private island in 2015,
Bloomberg reported.
Barclays has previously said that Staley never engaged or
paid fees to Epstein to advise him or provide professional
services.
The probe is the second regulatory investigation into
Staley's conduct in recent years, after the FCA and PRA fined
him 642,000 pounds in 2018 for trying to identify a
whistleblower who sent letters criticizing a Barclays employee.
Barclays shares fell 3.4% on Thursday morning.
Staley received a bumper pay package of 5.9 million pounds
($7.64 million) in 2019, up from 3.36 million a year earlier.
The sum was boosted by the paying out of a long-term incentive
plan worth 1.48 million pounds.
His bonus also rose to 1.65 million pounds, reflecting the
bank's strong annual performance.
Both Staley and Finance Director Tushar Morzaria took cuts
to their pension allowances in 2019, and will now receive fixed
cash contributions equating to 10% of salary in line with the
broader workforce.
Lower-paid employees will see their employer pension
contributions rise to 12%.
The bank meanwhile reported a better-than-expected profit
before tax of 6.2 billion pounds for 2019, as its investment
bank reported bumper returns from fixed-income trading.
Its profit was 9% higher than in 2018 and above the 5.7
billion pound average of analysts' forecasts compiled by the
bank.
The British lender also reiterated its ambition of achieving
a 10% return on equity this year, although it repeated a warning
from October that the worsening economic outlook might make
reaching that target difficult.
Staley has said that Barclays' mix of investment and retail
banking businesses should partly insulate it from economic and
market fluctuations.
Barclays paid a dividend of 9 pence for the year, compared
with 6.5 pence for 2018, as its core capital ratio came in at a
better-than-expected 13.8%.
($1 = 0.7723 pounds)
(Editing by Sinead Cruise and Jan Harvey)
