Dutch lender Rabobank to face near-$1 bln Libor charge - FT

Reuters

Oct 22 (Reuters) - Rabobank could face a near $1billion fine next week from British and U.S. regulators lookingto settle allegations that the Dutch lender helped manipulatethe Libor and other benchmark interbank lending rates, theFinancial Times reported, citing three people familiar with thematter.

This larger than anticipated penalty would be the secondbiggest payout by a financial institution since a sprawlingglobal investigation into the rate-rigging scandal began in2008. UBS late last year paid a record fine of $1.5billion.

Rabobank was previously expected to face a fine of betweenthe 290 million pounds ($470.16 million) imposed on Barclays and the $612 million deal struck by Royal Bank ofScotland, according to a Bloomberg report from Februarythat cited a source with knowledge of theinvestigation.

Cooperatively owned Rabobank made an unspecified provisionin its first-half results for settling with regulators over theLibor rate scandal, when it reported a 14 percent drop in netprofit to 1.1 billion euros ($1.52 billion), reflecting higherbad debts.

The settlement is also set to include an allegation in theUnited States of criminal wrongdoing against a former Rabobanktrader, the FT reported on its website, citing a person familiarwith the situation. ()

Rabobank, the second-largest Dutch financial group byassets, is set to face regulators including Britain's FinancialConduct Authority, the U.S. Department of Justice, the U.S.Commodity Futures Trading Commission.

Rabobank, the FCA and the CFTC declined to comment, whilethe Department of Justice did not immediately respond to arequest for comment.

More than a dozen banks and brokerages are beinginvestigated by regulators and anti-trust watchdogs worldwidefor manipulating benchmark rates such as Libor and Euribor,which are used to price trillions of dollars of products fromderivatives to credit cards.

Rabobank, which is in the midst of sweeping job cuts, branchclosures and reductions in remuneration packages, was one of thefew Dutch financial services groups to avoid nationalisation ora state bail-out in the 2008 financial crisis.

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