LONDON – The British lender Lloyds Banking Group said on Friday that it was in “late-stage” discussions to resolve regulatory inquiries into its role in setting global benchmark interest rates, including the London interbank offered rate, or Libor.
The settlements, if reached, would make Lloyds the latest major bank to settle accusations that its employees conspired to manipulate benchmark interest rates — a scandal that has badly damaged the reputation of several banks and cost global financial institutions billions of dollars in penalties.
Lloyds, which is partly owned by the British government, served on several panels of banks that helped set Libor rates tied to the dollar, the yen and other currencies.
“L.B.G. confirms that it is in late-stage settlement discussions with a number of agencies,” the bank said. “The settlements remain to be agreed and L.B.G. expects they will include the payment of penalties.”
The Financial Times, citing unnamed sources, reported late Thursday that Lloyds was preparing to pay up to 300 million pounds, or about $510 million, to regulators in Britain and the United States to resolve investigations into the conduct of its employees related to Libor and that the settlement could be announced as early as next week.
Lloyds is expected to announce its second-quarter results on Thursday.
Barclays became the first bank to reach a settlement in the Libor investigation, paying $450 million in 2012. The revelations from the investigation damaged the reputation of Barclays, and, under pressure from regulators, the bank ousted its chief executive, Robert E. Diamond Jr.
Since then, more than a half dozen of the world’s largest financial institutions have settled with regulators in the United States, Britain and other parts of Europe. They include Royal Bank of Scotland, Deutsche Bank and UBS.
British prosecutors also have brought criminal charges against nine individuals. The first criminal trial in the matter is expected next year.
In May, European competition regulators formally accused JPMorgan Chase, HSBC and Crédit Agricole of having colluded to fix benchmark interest rates tied to the euro.
The European Commission had previously fined a group of financial institutions 1.7 billion euros, or about $2.3 billion, related to the manipulation of Libor and other global benchmark rates.
JPMorgan had previously agreed with European officials to a settlement over accusations connected to the manipulation of Libor as it related to the yen.