Lloyds fires eight over Libor scandal

Banking group is also withholding £3 million in bonuses

(Getty Images)

Lloyds Banking Group has fired eight people in the wake of the Libor rigging scandal which cost it £218 million in fines earlier this year.

The bank said it would claw back bonuses and deferred payments totalling £3 million from the eight, whom it would not name.

Chief executive Antonio Horta Osorio said: “Having now taken disciplinary action against those individuals responsible for the totally unacceptable behaviour identified by the regulators’ investigations, the board and the group’s management team are committed to preventing this type of behaviour happening again.”

The Financial Conduct Authority — which fined Lloyds £105 million in July — said 16 individuals at the bank, including seven managers, had been involved in rigging Libor and another four in manipulating the so-called “repo” rate between 2006 and 2009. Its investigation revealed the cavalier way in which staff at what most of the public considered a dull High Street bank had ignored ethics and were driven by greed.

Apparently referring to one of his manipulations of the benchmark, one trader told his manager: “Every little helps … it’s like Tescos.” His boss responded: “Absolutely, every little helps.”Another Lloyds trader told a broker: “I’ve got no fixing today. So I can do my Libors wherever I f***ing want to put them, mate.”

Lloyds said today it had not been able to take any disciplinary action against staff who had left the bank before the enforcement actions were announced in July.

Chairman Lord Blackwell said: “The board has been clear that it views the actions of those responsible for the misconduct referred to in the settlements as being completely unacceptable. It is entirely right that the group undertook a prompt, independent and thorough disciplinary process immediately after the settlements were announced and has taken appropriate action as a result. A number of individuals have been dismissed.”

Royal Bank of Scotland and Deutsche Bank have both previously sacked staff involved in Libor rigging, but not in such a public manner.

Lloyds said that it could not name the individuals involved because they could still be the subject of enforcement by the FCA or could even face criminal charges. It said it had “shared all relevant information with the FCA and other relevant authorities.”

As well as the £105m fine by the FCA, Lloyds paid $105m (£65m) to the US Commodity Futures Trading Commission and $86m to the US Department of Justice in its July settlement. It was also forced to pay the Bank of England £7.6m in compensation for the higher fees that the Bank would have received from its Special Liquidity Scheme if Lloyds had not rigged the interest rate benchmarks.

The Bank’s Governor, Mark Carney, said: “Such manipulation is highly reprehensible, clearly unlawful and may amount to criminal conduct on the part of the individuals involved.”

Lloyds is still 25 per cent owned by the taxpayer following its £45bn bailout at the height of the financial crisis. The Chancellor had hoped to sell off another chunk of shares to the public before the election next year but was forced to scrap that because of the Scottish referendum. He may yet sell a tranche to institutions.