European banks start to make provisions for U.S. WhatsApp fines

European banks are starting to count the cost of their employees’ messaging habits, which have caught the attention of U.S. regulators in a sweeping global investigation.

Credit Suisse announced a $200 million charge in its earnings on Wednesday, saying it was in connection with a probe into business communications over unapproved electronic messaging channels.

Gabby Jones/Bloomberg

Barclays — one of the banks that have not disclosed their involvement — is working with U.S. regulators in relation to the investigation, according to people with knowledge of the matter. A spokesperson for Barclays, which is scheduled to publish earnings on Thursday, declined to comment. 

Deutsche Bank increased its regulatory enforcement provisions by 165 million euros ($167 million) on Wednesday, which it said covered issues including the work by the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission on unapproved devices and record-keeping requirements. 

The German lender is rolling out new software on corporate mobile phones that archives WhatsApp messages, while members of the management board have agreed to pay cuts of about 75,000 euros each as they take responsibility for the widespread use of unapproved messaging among staff, Bloomberg has reported.

UBS Group on Tuesday also confirmed it was cooperating with U.S. authorities. The finance industry has long prohibited staff from doing business on nonapproved platforms in order to comply with record-keeping rules, yet regulators have found multiple examples of employees communicating on personal accounts.

HSBC Holdings, which said in February it was part of the U.S. probe, recently fired a trader in London after scrutinizing the personal mobile phones of some staff.

Regulators are poised to extract about $1 billion in fines from the five biggest U.S. investment banks. JPMorgan Chase settled its case in December by agreeing to pay $200 million, while Morgan Stanley disclosed earlier this month that it expected to pay a similar amount. Citigroup, Goldman Sachs Group and Bank of America are also preparing for penalties.