Bloomberg News

Barclays Probably Won’t Face Successful Litigation, Analyst Says

July 04, 2012

Barclays Plc (BARC), the U.K.’s second- largest bank, has a “low” chance of facing successful litigation after it was fined for seeking to manipulate Libor rates, said analysts at Espirito Santo Investment Bank.

“The probability of any litigation being successful against Barclays appears to be quite low, meaning that ultimate damages against the banks, and Barclays in particular might not be very material,” wrote analysts led by Andrew Lim in a note to clients today. The comments follow an analyst call yesterday with Barclays Finance Director Chris Lucas.

Barclays was hit by a record 290 million-pound ($455 million) fine last week for rigging the London interbank offered rate, a benchmark for more than $360 trillion of securities. It led to the resignation of the top three executives at the bank including Chief Executive Officer Robert Diamond. Lucas said yesterday “the burden of proof would be very high” for civil litigants on the analyst call.

Lucas also said the London-based bank had not “suffered any deposit flight as a result of recent events and that risk spreads in the debt markets had not indicated any increased distress for the bank,” Lim said. “In this respect the Barclays franchise appears unaffected, which is a positive,” Lim said.

To contact the reporter on this story: Ambereen Choudhury in London at achoudhury@bloomberg.net

To contact the editor responsible for this story: Edward Evans at eevans3@bloomberg.net


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