By Justin Baer
Goldman Sachs Group Inc. said U.S.
inquiries into the way Wall Street packaged and sold mortgage bonds ahead of the
financial crisis may bring about a "significant increase" in the firm's legal
costsIn its quarterly regulatory filing, Goldman said "ongoing investigations by members of the Residential Mortgage-Backed Securities Working Group of the U.S. Financial Fraud Enforcement Task Force" could results in a rise in its liabilities tied to mortgage-related matters
Those potential costs, however, weren't factored into a range of "reasonably possible" losses Goldman faces related to various legal and regulatory disputes
Goldman this week raised the top end of that range to $4 billion above what it had already set aside in legal reserves, up from $3.5 billion at the end of June
In the same filing, Goldman said its traders suffered losses on 15 days during the third quarter, including two days in which they lost more than $25 million
Goldman had the most number of trading-loss days in any quarter since the third period of 2011, when traders suffered losses on 21 days
Goldman's fixed-income, currencies and commodities trading revenue tumbled during the period, as economic and political uncertainties damped clients' appetite to take risks
The New York-based firm said net trading revenue had exceeded $100 million on four separate days
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By MarketWatch
PARIS--Credit Agricole SA Chief Executive Jean-Paul Chifflet said Thursday the French bank would fight any accusation by the European Commission that it took part in the alleged rigging of the euro interbank offered rate, or Euribor.
Mr. Chifflet said Credit Agricole had refused a proposal by the Commission to negotiate an out-of-court settlement in the case, saying the bank had a strong defense.
"Things are very clear, we have an excellent case, and so I have rejected the idea of any kind of settlement, which would have been tantamount to a recognition of guilt, something that has no ground here," Mr. Chifflet told reporters in a conference call.
Mr. Chifflet's comments come a day after The Wall Street Journal and other media reported that EU antitrust regulators were poised to levy large fines against a group of global banks, including Credit Agricole, tied to their alleged attempts to manipulate benchmark interest rates.
The Credit Agricole chief executive said he was "surprised" by what he called "cleverly organized leaks."
The Commission's probe is part of a wider investigation conducted by several national regulators including in the U.S. and the U.K. into whether banks colluded to manipulate benchmarks, such as Euribor and the more widely used London interbank offered rate, or Libor.
Mr. Chifflet said the bank was cooperating with authorities on the Libor investigation but so far hadn't been accused of any wrongdoing.
Since June 2012, U.S. and British regulators have hit five financial institutions--Barclays PLC , UBS AG , Royal Bank of Scotland Group PLC , ICAP PLC and Rabobank--with a total of more than $3.5 billion in fines.
Credit Agricole said Thursday it swung to a third-quarter profit, bouncing back from a year-ago record loss that was weighed down by a 1.77 billion euros ($2.39 billion) loss on the sale of its Greek unit.
The Paris-based lender, France's second largest listed bank by assets, said net profit stood at EUR728 million in the three months ended September, below analyst expectations of EUR868.5 million. The bank had booked a EUR2.85 billion loss in the same period a year earlier.
Revenue was up 16% at EUR3.97 billion, from EUR3.43 million a year ago, lifted by the sales of Hong Kong-based brokerage CLSA Asia-Pacific Markets and of a stake in Spanish lender Bankinter SA
The bank said it targeted a core tier ratio of 7.8% to 8% by January 2014 and of 8.8% to 9% by the end of next year. It said this ratio, a key measure of a bank's financial health, will be above 9.5% by December 2015.
Separately, the bank also said Thursday it had entered exclusive talks with joint-venture partner Societe Generale SA for the sale of its 50% stake in brokerage firm Newedge for EUR275 million. In a proposed parallel deal, Credit Agricole will buy a 5% stake in Amundi from Societe Generale for EUR337.5 million, raising its total stake in the asset-management firm to 80%.
WASHINGTON (MarketWatch) -- The Royal Bank of Scotland Group /quotes/zigman/530544/delayed/quotes/nls/rbs RBS -2.00% /quotes/zigman/10330253/realtime UK:RBS -1.89% has agreed to pay over $150 million to settle Securities and Exchange Commission allegations that RBS Securities misled investors in a 2007 offering of a subprime mortgage-backed security. The SEC alleges that the unit that was then Greenwich Capital Markets said the loans backing the offering "generally" met the lender's underwriting guidelines even though nearly 30% fell so short of the guidelines that RBS should have excluded them from the offering entirely. RBS didn't admit or deny the allegations.
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