Barclays Bank is expected to more than double its existing financial provision for alleged manipulation of foreign exchange markets to at least £1 billion when it reports its annual results next week.
Authorities in the United States are attempting to reach settlements within weeks with a host of global banks over their attempted manipulation of forex markets. Barclays has already made a provision of £500 million for forex wrongdoing during the course of last year.
Barclays had agreed the parameters of a settlement with the UK’s Financial Conduct Authority and the Commodity Futures Trading Commission in the US, according to Sky News. However, Barclays excluded itself from a broader settlement between those regulators and six banks in November to secure a binding agreement with all relevant authorities, insiders said at the time.
Talks between some of the banks and the US Department of Justice have accelerated since the start of the year, one regulatory source said.
Six banks — Bank of America, Citigroup, HSBC, JP Morgan, RBS and UBS — were fined more than $4 billion last year for their roles in the forex- rigging scandal. HSBC set aside £357 million this week for further penalties after paying about £395 million in fines last year, and Royal Bank of Scotland used its full-year results yesterday to add to its bill for control failings in its forex operations.
RBS also suspended a further two traders this week as the investigation into the market continues. A settlement involving the Department of Justice, the New York State Department of Financial Services and other regulators could come as soon as the end of next month, according to insiders.
For Barclays, an overall settlement costing more than £1 billion would exceed some analysts’ estimates but would draw a line under a lingering regulatory hurdle for the bank.
Barclays declined to comment.