Factbox - Recent British banking scandals
(Reuters) - Here is a look at some of the scandals that have engulfed banks in Britain, as Barclays said it had set aside a further 1 billion pounds, including a 600 million to compensate customers for mis-selling them payment protection insurance.
* MIS-SELLING INSURANCE - Payment protection insurance (PPI) became one of the worst consumer financial scandals in British history. PPI policies were usually offered to those taking out a personal loan or mortgage to cover repayments if clients fell ill or lost their jobs.
However, the policies were often sold to those who did not want or need them. Lloyds increased in November the amount it had set aside to deal with claims by 1 billion pounds to 5.3 billion pounds. Industry sources have said the total bill could be 25 billion pounds and take banks several years to clear. Banks have so far set aside more than 12 billion pounds to deal with the scandal.
* LIBOR SCANDAL - More than a dozen banks are under investigation by authorities in Europe, Japan and the United States over the suspected rigging of the London interbank offered rate (Libor), an interest rate used in contracts worth trillions of dollars globally.
Barclays has already been fined $450 million (287 million pounds) by British and U.S. regulatory bodies for its part in manipulating Libor rates. The scandal cost chief executive Bob Diamond and chairman Marcus Agius their jobs. The scandal also affected RBS, Lloyds and HSBC in Britain.
Swiss bank UBS was fined $1.5 billion at the end of 2012. Banks are also facing the risk of legal action from those seeking compensation. RBS fines will be revealed later this week and the bank is expecting a fine between 400 and 500 million pounds over Libor and other benchmark interest rates.
* ANTI-MONEY LAUNDERING BREACHES - Standard Chartered was fined $340 million in September by a New York regulator for illegally hiding transactions with Iran, allowing the country to sell its oil for dollars from at least 2001 to 2007.
The bank settled other actions last December by paying a further $327 million for violating U.S. sanctions against Iran, Sudan and other states. HSBC also agreed last December to pay $1.92 billion, a record fine, to settle the investigation by U.S. prosecutors who accused HSBC of failing to enforce rules to prevent money laundering. Lloyds was the first to settle, forfeiting $350 million in January 2009 for masking the origin of payments to evade U.S. sanctions on Iran, Libya and Sudan between 2002 and 2007. Others to pay penalties included ING, Credit Suisse, Barclays and ABN Amro, now part of RBS.
* MIS-SELLING INTEREST-RATE HEDGING PRODUCTS - Rate-swap products were designed to protect firms against rising interest rates, but when rates fell they had to pay large bills. Last month Britain's FSA said it found that in the 173 interest-rate swap test cases it examined, more than 90 percent did not comply with at least one or more regulatory requirements. So far Barclays has taken the highest provision, setting aside 450 million pounds for compensation, HSBC about 150 million pounds, RBS 50 million pounds and Lloyds said costs won't be material.
Sources: Reuters/www.fsa.gov.co.uk (Reporting by David Cutler, London Editorial Reference Unit)
* MIS-SELLING INSURANCE - Payment protection insurance (PPI) became one of the worst consumer financial scandals in British history. PPI policies were usually offered to those taking out a personal loan or mortgage to cover repayments if clients fell ill or lost their jobs.
However, the policies were often sold to those who did not want or need them. Lloyds increased in November the amount it had set aside to deal with claims by 1 billion pounds to 5.3 billion pounds. Industry sources have said the total bill could be 25 billion pounds and take banks several years to clear. Banks have so far set aside more than 12 billion pounds to deal with the scandal.
* LIBOR SCANDAL - More than a dozen banks are under investigation by authorities in Europe, Japan and the United States over the suspected rigging of the London interbank offered rate (Libor), an interest rate used in contracts worth trillions of dollars globally.
Barclays has already been fined $450 million (287 million pounds) by British and U.S. regulatory bodies for its part in manipulating Libor rates. The scandal cost chief executive Bob Diamond and chairman Marcus Agius their jobs. The scandal also affected RBS, Lloyds and HSBC in Britain.
Swiss bank UBS was fined $1.5 billion at the end of 2012. Banks are also facing the risk of legal action from those seeking compensation. RBS fines will be revealed later this week and the bank is expecting a fine between 400 and 500 million pounds over Libor and other benchmark interest rates.
* ANTI-MONEY LAUNDERING BREACHES - Standard Chartered was fined $340 million in September by a New York regulator for illegally hiding transactions with Iran, allowing the country to sell its oil for dollars from at least 2001 to 2007.
The bank settled other actions last December by paying a further $327 million for violating U.S. sanctions against Iran, Sudan and other states. HSBC also agreed last December to pay $1.92 billion, a record fine, to settle the investigation by U.S. prosecutors who accused HSBC of failing to enforce rules to prevent money laundering. Lloyds was the first to settle, forfeiting $350 million in January 2009 for masking the origin of payments to evade U.S. sanctions on Iran, Libya and Sudan between 2002 and 2007. Others to pay penalties included ING, Credit Suisse, Barclays and ABN Amro, now part of RBS.
* MIS-SELLING INTEREST-RATE HEDGING PRODUCTS - Rate-swap products were designed to protect firms against rising interest rates, but when rates fell they had to pay large bills. Last month Britain's FSA said it found that in the 173 interest-rate swap test cases it examined, more than 90 percent did not comply with at least one or more regulatory requirements. So far Barclays has taken the highest provision, setting aside 450 million pounds for compensation, HSBC about 150 million pounds, RBS 50 million pounds and Lloyds said costs won't be material.
Sources: Reuters/www.fsa.gov.co.uk (Reporting by David Cutler, London Editorial Reference Unit)
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