Lloyds fined £218m by US and UK regulators over Libor manipulation

Lloyds Banking Group, bailed out by British taxpayers during the financial crisis, will pay £218 million (HK$2.86 billion) in fines to British and United States regulators after manipulating benchmark interest rates.

The lender will pay US$105 million to the Commodity Futures Trading Commission (CTFC), US$86 million to the Department of Justice and £105 million to Britain's Financial Conduct Authority (FCA), according to a statement yesterday. Lloyds has also paid a further £7.8 million in compensation to the Bank of England after the actions of its traders reduced the fees the central bank received from one of its emergency-rescue packages.

"The actions of these individuals between 2006 and 2009 are completely unacceptable," Lloyds chairman Norman Blackwell said.

"Their behaviour involved a gross breach of trust and we condemn it without reservation."

Prosecutors and regulators around the world are investigating firms to determine how traders at more than a dozen firms colluded to rig the London interbank offered rate and related benchmarks to profit on their own derivatives deals. At least nine financial firms have been fined about US$6 billion for manipulating Libor, the benchmark interest rate for more than US$300 trillion of securities worldwide.

Lloyds's penalty is less than the £290 million Barclays paid in June 2012 when the London-based lender became the first to settle Libor-manipulation claims. UBS, Switzerland's biggest bank, has paid the most, settling with US, British and Swiss regulators in 2012 at the cost of US$1.5 billion.