LONDON - Royal Bank of Scotland Group PLC, Britain’s biggest taxpayer-owned lender, said it expects to pay a fine in the coming months to settle regulators’ probes into allegations the lender tried to manipulate Libor.
Whether the penalty exceeds the record 290 million pounds ($467 million) Barclays PLC paid in June or not “it will still be a miserable day in RBS’s history,” CEO Stephen Hester told reporters on a call today as the bank posted third-quarter operating profit that beat analyst estimates. “I’d be disappointed if we were talking to you at our full-year results in February without having had more news.”
RBS is one of more than a dozen banks worldwide facing regulatory probes into allegations that they manipulated the London interbank offered rate, the benchmark for more than $300 trillion of securities. The Edinburgh-based lender has fired at least four traders following an internal probe, and last month suspended its head of rates trading for Europe and the Asia-Pacific region, the first senior manager to be put on leave.
Libor is the biggest regulatory obstacle to overshadow Hester’s attempts to overhaul the company after it received the biggest banking bailout in history in 2008. RBS said today it would set aside a further 400 million pounds to compensate clients wrongly sold loan insurance and derivatives, bringing the total the bank has earmarked to 1.7 billion pounds.
The shares fell 2.1 percent to 281.2 pence as of 11:32 a.m. in London, little more than half the price the government paid when it provided RBS with a 45.5 billion pound rescue during the financial crisis. The stock has climbed 39 percent this year.
The net loss for the quarter was 1.38 billion pounds compared with a 1.23 billion pound profit in the year-earlier period. Analysts had predicted a loss of 276 million pounds, according to the median estimate of eight surveyed by Bloomberg.
Join PBN for the best networking event and party of the winter - January 15, 2015 - the Book of Lists Party at the Providence Public Library. Reserve your spot by December 31st and get a holiday gift from PBN!
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.