Swiss bank UBS says it’s close to settling with the U.S. Department of Justice on allegations linking it to a major currency-price-fixing scheme. The scandal, in which groups of currency traders at major banks allegedly colluded to manipulate benchmark exchange rates on behalf of bank clients, has already cost UBS and five other banks billions of dollars in penalties.
“Discussions with DOJ have continued and are at an advanced stage, although no agreement has been reached,” UBS said in its first-quarter earnings report released Tuesday, adding that it has set aside cash to cover settlements related to the investigations. Typically banks settle with regulatory authorities without admitting guilt, but U.S. authorities said in February that they want banks to plead guilty to felony misconduct.
In November, six banks -- UBS, JPMorgan, HSBC, Royal Bank of Scotland, Bank of America and Citigroup -- agreed to pay $4.3 billion to settle civil allegations in the U.S., Britain and Switzerland. Regulators said currency traders at the banks formed secret chatrooms to share information aimed at manipulating rates among major currency pairs, like the British pound and U.S. dollar, and the U.S. dollar and Japanese yen.
UBS was slapped with an $800 million penalty while JPMorgan and Citigroup were ordered to pay $1 billion apiece. But UBS and the other banks still face other investigations in the U.S. and elsewhere, and could face U.S. antitrust and criminal penalties. The banks also face a raft of class-action lawsuits.
But on Tuesday, UBS also reported strong revenue and profit growth, which pushed the bank’s stock price up 6.33 percent to 20.15 Swiss francs in Zurich. The stock is up more than 6 percent since the start of the year.
UBS reported 86 percent more net profit in the first three months of the year, to 1.98 billion Swiss francs from 1.05 billion. Operating income increased 22 percent to 8.84 billion Swiss francs from 7.26 billion. Net interest income, a key metric for banks that measures profits made from loans, increased 4 percent to 1.64 billion Swiss francs from 1.57 billion.