UBS, Switzerland's biggest bank, must pay about 1.4 billion Swiss francs (US$1.5bn) to US, UK and Swiss regulators for trying to rig global interest rates, triple the penalties levied against Barclays.
Fines from the US Commodity Futures Trading Commission and the US Department of Justice total $1.2 billion, UBS said in a statement. It will pay £160 million to the UK Financial Services Authority, the largest-ever fine imposed by the regulator, and disgorge 59 million francs in estimated profits to the Swiss Financial Market Supervisory Authority.
"Clearly, this chapter isn't positive," the UBS chief executive Sergio Ermotti said. "We want to move forward and I think we're showing our determination in the bank to move forward and to change the bank for good."
About 30 to 40 people have left UBS as a result of the probes, Mr Ermotti said, adding that the behaviour of certain employees was "unacceptable." He said he does not expect any more departures.
UBS rose 0.4 per cent to 15.31 francs in early Swiss trading. The stock has advanced 37 per cent this year, outpacing a 23 per cent increase in the Bloomberg Europe Banks and Financial Services Index, which tracks 38 companies.
Global authorities are investigating claims that more than a dozen banks altered submissions used to set benchmarks such as the London interbank offered rate to profit from bets on interest-rate derivatives or make the lenders' finances appear healthier. Barclays, the UK's second-biggest bank, agreed to pay £290m in June to resolve the US and UK Libor probes.
The UK finance regulator found more than 2,000 documented requests by UBS traders to manipulate rates in chat messages and group e-mails, and that at least 45 people at the bank knew of the practice between over a six-year period until the end of 2010. Bank employees colluded with interdealer brokers and paid them bribes to help manipulate yen Libor submissions by other banks, the FSA said in a statement.
"This is quite outrageous," said Dirk Becker, an analyst at Kepler Capital Markets with a reduce rating on UBS. "I was surprised that UBS was apparently one of the biggest instigators of this scandal."
UBS traders made "numerous requests" asking bank employees to submit interest rates with higher or lower values to benefit their proprietary trading positions, the Swiss regulator said in a statement, adding that evidence shows that "many" of the requests for Libor rates in Zurich and London were accepted.
* Bloomberg News
