France''''s second-biggest bank Societe Generale will pay US authorities $1.34 billion to settle allegations that it bribed officials in Libya and also manipulated the Libor interest rate benchmark, the US Justice Department announced Monday. French prosecutors had said earlier that the bank had agreed to pay 500 million euros ($583 million) to end inquiries in the US and France into its dealings with the regime of slain Libyan dictator Moamer Qadhafi.
The French financial prosecutor''''s office said the bank had agreed to pay 250 million euros each to France and the US to avoid corruption trials on either side of the Atlantic. Societe Generale itself announced earlier that it reached agreements to settle the Libya investigations as well as a separate US investigation into its alleged rigging of Libor interest rates.
The bank did not say how much it had paid in total but said it had already provided for the cost and that it would have "no impact on Societe Generale''''s results". Last month, it said it had set aside one billion euros to settle the disputes.
Libya''''s sovereign wealth fund, the Libyan Investment Authority, had accused Societe Generale of channelling bribes to associates of Qadhafi''''s son Seif al-Islam as part of a "corrupt scheme" to get the LIA to invest billions in Societe Generale and its subsidiaries between 2007 and 2009. The fund claimed that at least $58 million in bribes was routed through a Panama-registered company called Leinada, which was headed by an associate of Seif al-Islam.
Societe Generale paid nearly a billion euros to the LIA last year to settle the case before it opened in the High Court in London. But it remained under investigation in the US and France. A French court on Monday approved the deal struck with French authorities to avoid a trial, with a US court expected to follow suit on Tuesday.
Societe Generale said it had also struck a deal with the US Department of Justice over its alleged attempt to manipulate the London Interbank Offered Rate (Libor), which governs credit costs around the world. "For years, Societe Generale undermined the integrity of global markets and foreign institutions by issuing false financial data and by fraudulently securing contracts through bribery," Acting US Assistant Attorney General John Cronan said on Monday.
The bank is the latest in a string of lenders, including Deutsche Bank, HSBC, Royal Bank of Scotland and Goldman Sachs, to pay hefty sums to settle allegations of conspiring to rig the rate. Deutsche Bank paid $240 million, while HSBC forked out $100 million. The announcement marks an end to a scandal which led to the surprise departure of Societe Generale''''s deputy CEO Didier Valet in March.
Valet, who reportedly quit over the way the dispute with the US was handled, was one of two senior executives to step down, along with the bank''''s head of retail banking. The departures rattled investors, casting a pall over Societe Generale''''s results in the first quarter. Higher-than-expected net profits of 850 million euros were offset by a decline in revenues of 2.8 percent to 6.3 billion euros. Societe Generale said that its French retail banking revenues were hit by low interest rates but were expected to stabilise in 2018.