Shares in banking group Barclays’ (BARC) shares slide 1.6% to 230.8p in early trading as the probe into its role in rigging the foreign exchange market is set to drag on. Regulators in three countries slapped fines on five banks, including HSBC (HSBA) and Royal Bank of Scotland (RBS) for their involvement in the scandal.
Barclays, however, pulled out of its settlement, saying that it is looking for a more ‘co-ordinated’ agreement with the Financial Conduct Authority (FCA), the UK regulator, and authorities in the US and Switzerland. Indeed, with potentially further fines expected from other regulators the bank is looking for a final settlement figure as an alternative to receiving individual fines.
In total the FCA issued £1.1 billion in fines.
HSBC fell 0.9% to 631.7p after receiving fines totalling £236 million, while the Royal Bank of Scotland barely moved, gaining 0.3% to 378.9p after being presented with a £400 million bill to wash away its sins.
RBS’ fines were within the provisions allocated in its third quarter results. Analysts at Investec highlight that RBS has warned that potentially ‘significant’ further settlements could be on the way from other regulators.
US banks JPMorgan Chase (JPM:NYSE) and Citibank (C:NYSE) will also have to make payments alongside Swiss outfit UBS (UBSN:VX).
This is not the first scandal to hit UK banks, which have also received fines for manipulating Libor - the rate at which banks borrow from each other - product miss-selling such as payment protection insurance (PPI) and breaking international sanctions by carrying transactions for Iran.