Financial Stocks Decline Amid Libor Scandal Fallout

Strategic Insights -

Citigroup shares were little changed after the Department of Justice declined to pursue civil or criminal charges for its alleged role in manipulating Libor rates. The decision comes after nearly three years of investigations into several major banks, including Citigroup, JP Morgan Chase, and Bank of America. The Libor scandal broke in 2012 when Barclays Bank revealed that several member banks had colluded to artificially raise or lower the published rate.

Key Takeaways:

  • The Department of Justice declined to pursue civil or criminal charges against Citigroup for its alleged role in the Libor scandal.
  • The Libor scandal involved several major banks, including Citigroup, JP Morgan Chase, and Bank of America, which allegedly colluded to artificially raise or lower the published rate.
  • The scandal broke in 2012 when Barclays Bank revealed the collusion, leading to a series of investigations and settlements.
  • Citigroup shares were little changed after the announcement, trading at $53.95.
  • The stock had risen about 12% over the past year prior to Monday's trade.
  • Other financial stocks, including JPMorgan Chase and Bank of America, are also implicated in the Libor scandal.
  • The Financial Times reported that Citigroup, JPMorgan Chase, and other banks had agreed to pay a combined $5 billion to settle their Libor-related charges.
  • Barclays would pay around $3.1 billion while Citigroup and JPMorgan would pay $1 billion each, according to the Financial Times.

Statistics:

  • Citigroup's stock price: $53.95
  • Stock price change: -0.1%
  • Daily trading range: $53.86 to $54.15
  • Past 12-month stock price increase: 12%
  • Citigroup's Libor-related fine: $1 billion (according to the Financial Times)
  • Total combined fine for all major banks implicated in the scandal: $5 billion
  • Barclays' fines: $3.1 billion
  • Deutsche Bank's fines: $2.5 billion (paid in December 2012)
  • Combined fines for Bank of America and HSBC: (date and amount not specified)

Sources:

  • U.S. Department of Justice
  • Citigroup's 10-Q quarterly report for the three months ended March 31
  • The Financial Times
  • Barclays Bank
  • JP Morgan Chase
  • Bank of America
  • Deutsche Bank
  • HSBC
  • Comtex News Network, Inc. (provider of the SmarTrend Alert system)