Financial Business Recap: Lloyd’s LEGAL Perils, Nomura’s Insider Trading FALLOUT

Here are Thursday’s top stories:

Lloyds Banking Group (NYSE:LYG) posts an unanticipated first half net loss of £641 million, which is down from a loss of £2.28 billion year-over-year from 2011. Analysts had instead expected a £314 million profit, but the firm had to set aside an additional £700 million during the period in order to pay back customers for mis-sold PPI policies. Separately, Lloyds has received subpoenas from authorities who are looking into the Libor scandal, and is also a defendant in several lawsuits linked to the matter. However, the company has yet to set aside reserves to cover any penalties, even as Liberum Capital calculates that it might be liable for as much as £1.5 billion.

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Banco Santander S.A. (NYSE:SAN) has now reached some 70 percent of the provisioning mandates set by Spanish government against real estate loans in its domestic market, which caused the bank to see its first half net profit drop by 51.3 percent to €1.7 billion, having had to set aside €1.3 billion in provisions. Santander’s non-performing loans rose by 1.17 percent year-over-year to 5.98 percent.

Nomura Holdings, Inc. (NYSE:NMR) Chief Executive Kenichi Watanabe and Chief Operations Officer Takumi Shibata have stepped down, after the third insider-trading scandal at the firm in the four years in which Watanabe has been leading it. Koji Nagai, the chief of the securities division, will be the new chief executive. At the same time, Nomura posts a fiscal first quarter net profit that dropped from ¥17.7 billion to ¥1.89 billion ($24.2 million).

BlackRock, Inc. (NYSE:BLK), Fidelity Investments and Vanguard Group report that they are attempting to assess in what manner Libor manipulation might have damaged their clients, and whether any legal action should be taken over the rate-rigging. The three companies collectively manage more than $7 trillion.

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