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Does the Financial Conduct Authority have a special department dedicated to investigating Barclays? Do they call it ‘The Barclays Suite’? Or ‘The Eagle Wing’?
They ought to. Because, this morning, the bank that has clocked up more overtime for the regulator than any other has delivered another boost to productivity. It has given both the FCA and the Prudential Regulation Authority reason to investigate its chief executive, Jes Staley.
According to the bank, Mr Staley attempted to identify the author of a letter that was treated by the bank “as a whistleblow”, which he was not allowed to do. As a result, the bank hired law firm Simmons & Simmons to conduct an investigation which found that Mr Staley “honestly, but mistakenly” believed that it was permissible to discover the author of the letter – and broke governance rules.
He has already paid one price for his “honest” mistake. Barclays says that, in addition to a formal written reprimand, it will make “a very significant compensation adjustment” to Mr Staley’s bonus. Quite how significant will depend on the findings of the FCA and PRA investigations. However, it is safe to say that Mr Staley can put the yacht brochures back on the shelf.
Barclays chairman John McFarlane expressed his regret that the conduct fell short of Barclays’ almost legendary ethical standards:
I am personally very disappointed and apologetic that this situation has occurred, particularly as we strive to operate to the highest possible ethical standards. The Board takes Barclays culture and the integrity of its controls extremely seriously.
The FCA no doubt shared his utter shock and disappointment.
Shares in Centamin Mining rose 3 per cent on Friday after US air strikes in Syria lifted the price of gold to its highest in nearly five months. That was almost as big a share move as the one that accompanied the quintupling of its dividend, after results in February. Investors might have expected such a strong performance to be better rewarded back then, but the relatively measured reaction suggested investors were cautious about future performance. Centamin said costs would rise 14 per cent this year, and production would decline slightly.
This morning, it showed by how much. Preliminary total gold production for the last quarter was 109,187 ounces – a 20 per cent decrease on the previous quarter and 13 per cent lower than Q1 2016. However, this reduction was in line with Centamin’s forecast, so the company was able to maintain its 2017 guidance of 540,000 ounces at a cash operating cost of US$580 per ounce, or an “all-in-sustaining cost” of US$790 per ounce.
Quarterly throughput at its process plant was 2,908kt, just a 1 per cent decrease on the previous quarter and in line with the 2017 annual forecast.
Chief executive Andrew Parde said:
As previously outlined in the 2016 full year results, production rates were forecast to decrease in the first quarter due to a planned reduction in average grade from the open pit… With the processing and underground mining operations also continuing to deliver strong levels of productivity, we remain on course to meet our full year 2017 production guidance of 540,000 ounces at a cash operating cost of US$580 per ounce and all-in-sustaining cost (AISC) of US$790 per ounce.
Meanwhile, fellow miner Anglo American has announced the sale of its Eskom-related domestic thermal coal operations in South Africa to a wholly owned subsidiary of Seriti Resources – a company majority owned by historically disadvantaged South Africans (“HDSAs”). These coal operations consist of the New Vaal, New Denmark and Kriel collieries and will result in Seriti becoming the second largest provider of thermal coal to Eskom, supplying almost a quarter of Eskom’s current annual coal requirements.
Under the terms of the deal, the consideration payable for the operations as at 1 January 2017 is ZAR2.3 billion (approximately US$164 million), but the amount will be adjusted for cash flows generated by the operations between 1 January 2017 and the date on which the transaction is completed.
Mark Cutifani, chief Executive of Anglo American, said:
We are pleased to have agreed the sale of our Eskom-tied domestic thermal coal operations in South Africa. This transaction forms part of our ongoing commitment to reshape and upgrade our global asset portfolio, recognising appropriate value and further demonstrating Anglo American’s longstanding support for the development and sustainability of South Africa’s mining industry.
And, finally, another miner has also been telling anyone who will listen what a good corporate citizen it is. Rio Tinto has released details of the $4bn it has paid in taxes and royalties, and claimed it also made a $35bn “direct economic contribution to host communities” in 2016.
Rio Tinto chief financial officer Chris Lynch said:
Rio Tinto is a major contributor to society and we are proud of the economic activity and wealth we generate through taxes, royalties, employee wages, payments to suppliers and investment in communities. From both a global and local perspective, our Taxes paid report helps inform our stakeholders about the role we play and the impact we have in the community.
And you though it just dug massive holes in the ground.
Have a productive day – and be good to your host community.
FT Opening Quote, with commentary by Matthew Vincent, is your early Square Mile briefing. You can sign up for the full newsletter here.