Monday, July 28, 2014

Lloyds Banking Nears Libor Settlement With Regulators

Lloyds Banking Group Plc (LLOY) said it’s nearing a settlement with regulators on fines following the manipulation of key benchmark interest rates such as Libor.

The company “confirms that it is in late-stage settlement discussions with a number of agencies,” Lloyds said in a statement today.

“The settlements remain to be agreed and LBG expects they will include the payment of penalties.”

Prosecutors and regulators around the world are investigating firms including Lloyds to determine whether traders colluded to rig the London interbank offered rate and related benchmarks.

Banks including Barclays Plc and UBS AG have been fined more than $6 billion for manipulating Libor, the benchmark interest rate for more than $300 trillion of securities worldwide.

Lloyds may pay a fine of between 200 million pounds ($340 million) to 300 million pounds, the Financial Times reported yesterday, citing three people familiar with the situation.

Barclays was fined 290 million pounds by regulators in the U.S. and the U.K. in 2012 for submitting false London and euro offered rates, prompting Chief Executive Officer Robert Diamond to resign. The Serious Fraud Office is prosecuting a dozen people in London in the Libor inquiry.

Seventeen individuals have been charged worldwide for alleged rigging of the interest-rate benchmark.

Ruth Wharram, a Financial Conduct Authority spokeswoman in London, declined to comment by telephone, when asked about the Lloyds fine.

CEO Antonio Horta-Osorio is seeking to return the 25 percent government-owned bank to full private ownership, after the U.K. sold a 4.2 billion-pound stake in March.

The company is scheduled to report first-half earnings on July 31. Shares of Lloyds, Britain’s biggest mortgage lender, gained 1.5 percent to 75.03 pence at 3:14 p.m. in London. They have decreased 4.9 percent this year.

bloomberg.com

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