UBS faces $1.6 billion fine over Libor rigging: paper
UBS faces a fine of 1.5 billion Swiss francs ($1.63 billion) to settle interest rate rigging charges, a Swiss newspaper reported on Saturday.
Citing unnamed sources, Tages-Anzeiger daily said the bank would admit 36 traders around the globe manipulated yen Libor between 2005 and 2010. A UBS spokesman declined to comment.
People familiar with the matter told Reuters on Friday UBS could reach a $1-billion-plus settlement and admit to criminal wrongdoing by its Japanese arm, where one of its traders manipulated yen Libor and euroyen contracts.
Between 25 and 30 people have left UBS over the matter, the sources said. The Swiss bank had hoped for a softer touch from regulators by cooperating in industry-wide probes and was surprised by the size of the expected settlement, they added.
A 1.5 billion franc settlement would be the biggest ever paid by the bank, recovering from a $2.3-billion trading fraud by London-based trader Kweku Adoboli for which it was fined 30 million pounds ($48.36 million) last month.
A settlement would make UBS the second major bank to be sanctioned for its role in the Libor scandal. Britain's Barclays paid a $450 million fine in June.
Libor is the rate used as a benchmark for pricing trillions of dollars worth of financial instruments and contracts around the globe. Tiny shifts in the rate, compiled from daily polls of bankers, could benefit dealers in complex products.
HEADING FOR LOSS
Tages-Anzeiger said the fine, together with restructuring charges of 500 million francs from plans to cut 10,000 staff as UBS winds down its fixed income business, would probably push the bank to a fourth-quarter loss.
UBS had already said costs related to the investment banking overhaul would lead to a fourth-quarter and full-year loss after it posted a third-quarter net loss of 2.172 billion francs. It is due to publish full-year results on February 5.
By admitting to a charge against its Japanese subsidiary, UBS would stop short of admitting wrongdoing at a group level, which could be fatal for a bank as it could lose its license.
Chairman Axel Weber, who joined UBS this year after stepping down as head of the German central bank, has been on a whirlwind diplomatic tour over the probe, the Tages-Anzeiger reported.
Swiss newspapers noted that Mark Branson, now responsible for overseeing big banks for Swiss financial markets regulator Finma, was chief executive of UBS Japan at the time of the alleged rate rigging.
A Finma spokesman said Branson had removed himself from Finma's investigation into Libor to avoid any appearance of conflict of interest but declined to comment further.
In 2009, UBS paid $780 million to settle a messy U.S. investigation into tax evasion by admitting it had helped wealthy Americans evade and cheat on their taxes. ($1 = 0.9218 Swiss francs) ($1 = 0.6204 British pounds)
(Reporting by Emma Thomasson; editing by Jason Webb)