UBS, UniCredit and Nomura fined €371m over European bond cartel

The EU antitrust watchdog has fined UBS, UniCredit and Nomura a total of €371m for their role in a bond trading cartel that operated during the region’s sovereign debt crisis.

Regulators found that traders at a total of seven banks provided each other with updates on their bidding strategies, prices and volumes in the run-up to auctions at which countries sold euro-denominated bonds. 

The commercially sensitive information was shared in chat rooms on Bloomberg terminals between 2007 and 2011, according to the European Commission which announced the fines on Thursday.  

EU competition regulators also said that NatWest, Bank of America, Natixis and German lender Portigon breached antitrust rules, but did not impose fines on the banks.

“Our decision against Bank of America, Natixis, Nomura, [NatWest], UBS, UniCredit and [Portigon] sends a clear message that the commission will not tolerate any kind of collusive behaviour,” said Margrethe Vestager, executive vice-president of the regulator. 

“It is unacceptable that, in the middle of the financial crisis, when many financial institutions had to be rescued by public funding, these investment banks colluded in this market at the expense of EU member states.”

The fines are the latest in a series of actions taken by the commission against banks for manipulating financial markets. Two years ago it fined Barclays, Citigroup, NatWest, JPMorgan and Japan’s MUFG a total of more than €1bn for rigging the multitrillion dollar foreign exchange market after the global financial crash.

It has also investigated banks over the manipulation of Libor, a key rate that underpins the price of loans around the world, as well the rigging of foreign exchange markets.

Regulators on Thursday handed UBS a €172m fine — reduced by 45 per cent due to its co-operation in the investigation — while Nomura was fined €130m and UniCredit was fined €69m.

NatWest escaped a €260m penalty as it reported the cartel to the commission, while Bank of America and Natixis were not fined because their infringements occurred outside the limitation period, which was more than five years before the commission started its investigation.

Portigon, which was formally called WestLB, did not generate any net turnover in the most recent business year, so its €4.8m fine was reduced to zero.

UniCredit said it would appeal against the decision before the European courts. “The group vigorously contests the decision and maintains that the findings do not demonstrate any wrongdoing on the part of UniCredit,” the bank said in a statement.

UBS also said it was considering appealing the fine. “This is a legacy issue dating back to 2007-11 and we have taken appropriate action years ago to mitigate and improve processes,” it said.

“Taking into account relevant provisions, this matter may have an impact of up to $100m on UBS’s second quarter 2021 results.”

Nomura said it too was considering an appeal. “Since the time of the relevant conduct, Nomura has introduced increased measures to ensure that we conduct our business with the highest levels of integrity at all times,” it added.

This article has been amended to clarify that Portigon is a German lender