RBS set for a miserable day as FSA readies Libor fine
TAXPAYER backed Royal Bank of Scotland is expected to be hit with a fine of around £390m by the City watchdog and US regulators today over its role in the Libor rigging scandal, piling further political pressure on the bank.
RBS, which is 82 per cent owned by the state, is to announce a settlement with the UK Financial Services Authority, US Department of Justice and US Commodity Futures Trading Commission over the scandal following months of negotiations over the size and severity of the punishment between the parties.
The fine, which will weigh in at around £390m, is set to be revealed at midday, although a source said there could be last minute changes to the figure.
Investment banking head John Hourican, who joined after the bailout, is also understood to be quitting the firm.
He will be forfeiting a £4m share bonus, despite the fact that regulators and the bank’s board acknowledge that he had no knowledge of, or involvement in, Libor-rigging.
Hourican, who took over the investment division after the Libor rigging incidents, is expected to leave the bank with a minimum payout of £700,000, equivalent to a year’s basic salary.
The Libor fine will be the latest in a string of punishments handed down by global financial regulators, which has seen Barclays fined £290m and UBS $1.5bn (£940m). RBS chief executive Stephen Hester has previously warned of a “miserable day” in the bank’s history when the fines are handed down. Publication of embarrassing emails exposing the extent of collusion between traders is also likely to heap scrutiny on the firm.
The outcome could prove politically explosive for the bank, which is still wrestling with its state owned structure. Chancellor George Osborne has previously said fines should be paid out of banking bonuses.